Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Loan relationships rules definition

What does Loan relationships rules mean? In practice, the loan relationships rules are the UK corporation tax regime that brings into tax a company’s profits and relieves its losses from lending and borrowing, including interest and related expenses, based largely on amounts recognised in the accounts. The regime is set out in the Corporation Tax Act 2009 (principally Part 5), which defines a “loan relationship” (broadly, a money debt arising from a loan) and applies an accounts-based credits and debits approach. It covers interest, discounts and premiums, foreign exchange gains and losses, impairment and releases of debt, and certain financing fees, with tax...

UK corporation tax—Loan relationships late‑paid interest: narrowed scope post‑FA 2015, participator loans to close companies, pension scheme loans, pre‑2015 position and RAAR

Published by a LexisNexis Tax expert

Practice notes

STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime

Finance Act 2025 (FA 2025), which received Royal Assent on 20 March 2025, brings in legislation to scrap the remittance basis of taxation and introduce a residence-based system from 6 April 2025. FA 2025 also removes domicile as the principal criterion for establishing inheritance tax liability.

Further measures include:

Revisions to the Rules that determine excluded property status
The removal of protected settlements status for offshore trusts
Changes to overseas workday relief

For more on these developments, see: Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26.

The Loan relationships rules in Part 5 of the Corporation Tax Act 2009 (CTA 2009) include Anti-avoidance provisions concerning the late payment of interest. Where these provisions (the late-paid interest rules) are engaged, they can postpone the point at which a corporation tax deduction is available to a debtor company for interest on a loan relationship. It should be noted at the outset that Finance Act 2015 (FA 2015) substantially narrowed the scope of the late-paid interest rules...

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Web page updated on 22/05/2026

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