.png)
.png)
There are a number of arrangements that, although they are not loans in legal form, have the economic effect of loans and are treated for the purposes of corporation tax in the same way as loans.
A company entering into such an arrangement as the borrower is normally allowed a tax deduction for amounts payable by it that are equivalent to interest.
These amounts form part of the UK financing expenses taken into account under Taxation (International and Other Provisions) Act 2010, Part 7.
New draft regulations provide that the same amounts are also taken into account in computing the available amount, thus ensuring that the comparison between UK and worldwide financing costs is made on a fair basis.
Comments on the draft regulations should be emailed to HMRC by 22 October 2010 via the department's website.
