Section 334 Non-UK resident company ceasing to hold loan relationship for section 333(2) purposesF4

United Kingdom

(1)

This section applies if an asset or liability representing a loan relationship of a company which is not UK resident ceases to be held or owed for F1section 333(2) purposes in circumstances not involving a related transaction (but see subsection (3)).

(2)

This Part applies as if—

(a)

immediately before the asset or liability so ceases the company had assigned it, so far as so ceasing, for consideration of an amount equal to its fair value at that time, and

(b)

the company had immediately reacquired it for consideration of the same amount.

(3)

This section does not apply if—

(a)

the conditions in section 344(1)(a) to (c) are met in relation to the company (transferee leaving group after replacing transferor as party to loan relationship), and

(b)

the asset or liability mentioned in subsection (1) ceases to be held or owed for F2section 333(2) purposes at the same time as the company ceases to be a member of the relevant group.

(4)

In subsection (3) “the relevant group” has the meaning given in section 344(4).

F3(5)

An asset or liability ceases to be held or owed for section 333(2) purposes if and in so far as—

(a)

it ceases to be held or owed for any purposes mentioned in section 333(2), and

(b)

on doing so, it does not begin or continue to be held or owed for any of the other purposes so mentioned.

Annotations

Textual amendments

F1: Words in s. 334(1) substituted (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 17(3), 35 (with Sch. 5 para. 36)
F2: Words in s. 334(3)(b) substituted (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 17(4), 35 (with Sch. 5 para. 36)
F3: S. 334(5) inserted (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 17(5), 35 (with Sch. 5 para. 36)
F4: Words in s. 334 heading substituted (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 17(2), 35 (with Sch. 5 para. 36)

Notes on Part 5

Modifications

C1: Pt. 5 applied (with effect in accordance with Sch. 24 paras. 13-16 of the amending Act) by Finance Act 2009 (c. 10), Sch. 24 para. 15(2)(3)
C2: Pt. 5 applied (with modifications) (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 990(5), 1184(1) (with Sch. 2)
C3: Pt. 5 modified (15.11.2011 for specified purposes, 30.3.2012 for E.W.) by Localism Act 2011 (c. 20), ss., 240(5)(o), Sch. 24 para. 5; S.I. 2012/628, art. 3(b)
C4: Pt. 5 modified (1.4.2012) by Budget Responsibility and National Audit Act 2011 (c. 4), s. 29, Sch. 4 para. 2; S.I. 2011/2576, art. 5
C5: Pt. 5 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)
C6: Pt. 5 modified (30.9.2013) by The BRB (Residuary) Limited (Tax Consequences) Order 2013 (S.I. 2013/2242), arts. 1, 7
C7: Pt. 5 modified (with effect in accordance with reg. 1(2)(3) of the amending S.I.) by The Taxation of Regulatory Capital Securities Regulations 2013 (S.I. 2013/3209), regs. 1(1), 11(3)-(6)
C8: Pt. 5 modified by 2010 c. 4, s. 356NC(1)-(4) (as inserted (1.4.2014) by Finance Act 2014 (c. 26), Sch. 16 paras. 4, 6)
C9: Pt. 5 modified by 2010 c. 4, s. 356NB(1)-(4) (as inserted (1.4.2014) by Finance Act 2014 (c. 26), Sch. 16 paras. 4, 6)
C10: Pt. 5 modified by 2007 c. 3, s. 809FZZ(9) (as inserted (with effect in accordance with s. 37(4) of the amending Act) by Finance Act 2016 (c. 24), s. 37(2))
C11: Pt. 5 modified by 2010 c. 4, s. 676AG(1) (as inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 75)
C12: Pt. 5 modified (for the tax year 2026-27 and subsequent tax years (but in relation to investment management services whenever performed)) by 2005 c. 5, Sch. A1 para. 35(7) (as inserted by Finance Act 2026 (c. 11), s. 58(6), Sch. 11 para. 1)