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HMRC internal manual

Corporate Finance Manual

Loan relationships: a brief history and a short guide


CFM30000 covers the taxation of loan relationships. If you don’t have much experience of corporate debt, you may like to look at CFM10000 which gives an introduction to corporate finance, and CFM20000 which explains the accounting treatment of financial transactions.

CFM30120 gives a brief explanation of how the loan relationships rules came about.

CFM30130 explains how the loan relationships regime fits into the wider corporation tax rules.

A summary of the key points

CFM30140 to CFM30200 provides a summary of the key points in the legislation - what loan relationships are and how they are taxed and computed. In straightforward cases you will need to look no further in the guidance to understand how the loan relationships rules apply.

E learning material

For HMRC users, there is e-learning material available through Online Learning which provides an overview of the loan relationships rules.

The full guidance

Where this summary does not cover the point at issue, you will need to refer to the full guidance, which is arranged as follows.

CFM31000 explains what loan relationships are.

CFM32000 explains how loan relationships are taxed.

CFM33000 explains how the taxable amounts arising under the loan relationships rules are computed.

CFM34000 explains the special rules that apply where a loan relationship is transferred between companies in the same group.

CFM35000 explains the special rules that apply to loan relationships between connected companies.

CFM36000 explains the special rules that apply to partnerships.

CFM37000 explains the rules that apply in certain special cases involving particular types of companies, such as collective investment schemes, and special types of securities, such as deeply discounted securities.

CFM38000 explains the anti-avoidance rules.

CFM40000 onwards explains the rules that apply to ‘relationships treated as loan relationships’ (or ‘deemed loan relationships’), which are primarily those that involve ‘money debts’ that do not arise from the lending of money.