Section 599A Amounts not fully recognised for accounting purposes: introductionF1

United Kingdom

(1)

Section 599B applies for the purpose of determining the credits and debits which a company is to bring into account for a period for the purposes of this Part in the following case.

(2)

The case is where—

(a)

the company is, or is treated as, a party to a derivative contract in the period, F2and

(F3b)

as a result of tax avoidance arrangements to which the company is at any time a party, an amount is (in accordance with generally accepted accounting practice) not fully recognised for the period in respect of the contract.

F4(3)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)

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(5A)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5B)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)

For the purposes of this section an amount is not fully recognised for a period in respect of a contract of a company F5... if—

(a)

no amount in respect of the contract F6... is recognised in determining its profit or loss for the period, or

(b)

an amount is so recognised in respect of only part of the contract ....

F7(7)

For the purposes of this section arrangements are “tax avoidance arrangements” if the main purpose, or one of the main purposes, of any party to the arrangements, in entering into them, is to obtain a tax advantage.

(8)

In subsection (7)—

(a)

“arrangements” includes any arrangements, scheme or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions, and

(b)

“tax advantage” has the meaning given by section 1139 of CTA 2010.

(9)

For the purposes of this section a company is to be treated as a party to a derivative contract even though it has disposed of its rights and liabilities under the contract to another person—

(a)

under a repo or stock lending arrangement, or

(b)

under a transaction which is treated as not involving any disposal as a result of section 26 of TCGA 1992 (mortgages and charges not to be treated as disposals).

Annotations

Textual amendments

F1: Ss. 599A, 599B inserted (with effect in accordance with Sch. 30 para. 3(3)(4) of the amending Act) by Finance Act 2009 (c. 10), Sch. 30 para. 3(1)
F2: Word in s. 599A(2)(a) inserted (19.7.2011) (with effect in accordance with Sch. 4 para. 13 of the amending Act) by Finance Act 2011 (c. 11), Sch. 4 para. 8(2)(a)
F3: S. 599A(2)(b) substituted (19.7.2011) for s. 599A(2)(b) (with effect in accordance with Sch. 4 para. 13 of the amending Act) by Finance Act 2011 (c. 11), Sch. 4 para. 8(2)(b)
F4: Ss. 599A(3)-(5B) omitted (19.7.2011) (with effect in accordance with Sch. 4 para. 13 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 4 para. 8(3)
F5: Words in s. 599A(6) omitted (19.7.2011) (with effect in accordance with Sch. 4 para. 13 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 4 para. 8(4)(a)
F6: Words in s. 599A(6)(a)(b) omitted (19.7.2011) (with effect in accordance with Sch. 4 para. 13 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 4 para. 8(4)(b)
F7: Ss. 599A(7)-(9) inserted (19.7.2011) (with effect in accordance with Sch. 4 para. 13 of the amending Act) by Finance Act 2011 (c. 11), Sch. 4 para. 8(5)

Notes on Part 7

Modifications

C1: Pt. 7 modified (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 601, 1184(1) (with Sch. 2)
C2: Pt. 7 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)
C3: Pt. 7 modified by 2007 c. 3, s. 809FZZ(8) (as inserted (with effect in accordance with s. 37(4) of the amending Act) by Finance Act 2016 (c. 24), s. 37(2))
C4: Pt. 7 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(6) (as inserted by Finance Act 2026 (c. 11), s. 58(6), Sch. 11 para. 1)