Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Loan relationships regime definition

What does Loan relationships regime mean? Describes the corporation tax rules that bring together a company’s interest, foreign exchange movements and other profits or losses on debt and related financial instruments, so that the accounting credits and debits are taxed or relieved in a coherent way. In UK practice, the loan relationships regime is the statutory code in Part 5 Corporation Tax Act 2009 (and related provisions). It requires companies to bring into account amounts arising from money debts, including interest, discounts, premiums, impairments, releases and exchange gains and losses, generally following UK GAAP or IFRS measurement (amortised cost or fair value), subject to...

UK corporation tax: impairment and debt releases in unconnected loan relationships—debtor exemptions, debt-for-equity, corporate rescue and creditor relief (amortised cost)

Published by a LexisNexis Tax expert

Practice notes

Under the loan relationships regime, a fundamental rule is that a company must bring profits and losses on its loan relationships into account for corporation tax in line with how those relationships are recognised in its accounts, provided that treatment complies with GAAP.

For more detail on the general framework governing how profits and losses on loan relationships are calculated and brought into account for corporation tax, see Practice Note: Loan relationships—the main tax rules.

There are, however, circumstances in which the loan relationships legislation requires the tax position to move away from the amounts shown in the accounts. This can arise where a debt within the loan relationships rules:

becomes impaired, or
is released (in whole or in part)

It should be made clear at the outset that these provisions—which can trigger a departure from the accounts in such cases—only apply where a company either accounts for a loan relationship using the amortised cost basis, or is required to apply the amortised cost basis for the purposes of its corporation tax computation...

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Web page updated on 22/05/2026

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