Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Money debt definition

What does Money debt mean? In practice, a money debt is an obligation that is, has been, or can (at the debtor’s or creditor’s option) be discharged in cash, by transferring a right to payment under another money debt, or by issuing or transferring shares. Any other settlement options are ignored when determining whether an obligation is a money debt. In UK corporation tax, the term is defined in the Corporation Tax Act 2009 within the loan relationships regime. A debt is treated as arising from a transaction for the lending of money where an instrument is issued to represent security for the debt...

UK corporation tax: disguised interest in the loan relationships regime—scope, 'economically equivalent to interest' test, exclusions, split returns and elections

Published by a LexisNexis Tax expert

Practice notes

A 'loan relationship' means a monetary debt arising from the lending of money. Yet this wording does not capture every form of arrangement or transaction that is taxed under the loan relationships regime. The regime’s scope is specifically and expressly extended to include certain other arrangements and transactions that are treated as equivalent to debt finance. These, often labelled 'deemed loan relationships', cover arrangements which, though not meeting the strict definition of a 'loan relationship', generate a return that is economically the same as interest (sometimes described as an interest‑like return, i.e. an interest-like return). For further detail on the meaning of loan relationship and the various types of 'deemed loan relationships' within the scope of the loan relationships taxing regime, see Practice Note: Loan relationships—what are they? For the computation rules governing how profits and losses on loan relationships are calculated, recognised and brought into account for corporation tax purposes, see Practice Note: Loan relationships—the main tax rules.

What do the disguised interest rules target?

The disguised interest rules aim to bring within the loan relationships taxing regime any arrangements that yield interest‑like returns, where they would otherwise fall outside it...

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Web page updated on 22/05/2026

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