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HMRC internal manual

Corporate Finance Manual

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HM Revenue & Customs
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Introduction to the Corporate Finance Manual: what is in the Corporate Finance Manual?

The Corporate Finance Manual starts with an explanation of the commercial and accountancy background to corporate finance. It then explains the corporation tax rules on loan relationships, foreign exchanges and derivative contracts.

Understanding corporate finance

CFM10000 onwards contains an overview of the commercial background to corporate finance. Use this section to find out how companies raise and invest money, how foreign exchange differences arise, and how and why companies use derivative products.

Accountancy

CFM20000 onwards explains the accounting rules on corporate finance. Use this section to find out about the accounting treatment of a company’s financial assets and liabilities, including foreign exchange and derivative contracts.

Loan relationships

CFM30000 onwards sets out the tax rules on ‘loan relationships’, which are found in Part 5 of the Corporation Tax Act 2009. Use this section to find out what loan relationships are and how they are taxed, including the rules on transactions between groups of companies and between connected companies, certain special types of company such as investment trusts, and certain special types of debt such as funding bonds.

Deemed loan relationships

CFM40000 onwards explains the tax rules on transactions that do not fall within the main loan relationships rules, but which are treated as loan relationships for tax purposes. The CFM refers to these as ‘deemed loan relationships’. These rules are found in Part 6 of the Corporation Tax Act 2009. Use this section to find out about how the loan relationships rules apply to ‘money debts’, disguised interest, holdings in investment funds, ‘alternative’ (Islamic) finance, ‘shares as debt’, and repos.

Derivative contracts

CFM50000 onwards explains the tax rules on derivative contracts, which are found in Part 7 of the Corporation Tax Act 2009. Use this section to find out about the corporation tax rules that apply to futures, forwards, options and swaps. This section also includes guidance on ‘hedging’ and the ‘Disregard Regulations’.

Foreign exchange and accounts drawn up in a foreign currency

CFM60000 onwards explains the tax rules on foreign exchange (‘forex’) and accounts drawn up in a foreign currency. Use this section to find out about the corporation tax rules on ‘matching’.

Other tax rules on corporate debt

Although the main body of the tax rules on corporate debt is in Parts 5 to 7 of the Corporation Tax Act 2009, some rules are to be found in other legislation. CFM70000 has details. Use this section to find out about special tax rules that apply to banks and building societies, securitisation companies, structured finance, manufactured payments, deduction of tax, changes of accounting practice, transfers of income streams and group mismatch.

Older versions of the legislation

The legislation on each of the three main topics has been subject to a number of changes over the years. CFM80000 sets out guidance on early versions of the rules.