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HMRC internal manual

Corporate Finance Manual

HM Revenue & Customs
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Loan relationships: particular types of company and particular types of security: overview

Special rules for particular types of company and particular types of security

CTA09/PT5 contains some special rules for particular kinds of companies and particular kinds of securities.

Insurance companies

Special rules on the loan relationships of insurance companies are set out in CTA09/PT5/CH10. See the Life Assurance Manual (LAM), the General Insurance Manual (GIM) and the Lloyd’s Manual (LLM) for further guidance.

Investment trusts and credit unions

Special rules on the loan relationship profits of certain other special types of company are set out in CTA09/PT5/CH11. The rules here apply to investment trusts, venture capital trusts and credit unions. CFM37020 has more details. See also the guidance on the loan relationships rules for companies that have holdings in certain types of investment fund (CFM43000).

Gilt-edged securities

See CFM37100 for guidance on indexed-linked gilts and gilt strips

Deeply discounted securities: connected companies and close companies

See CFM37200 for guidance on deeply discounted securities issued between connected companies and by close companies.

Funding bonds

See CFM37400 for guidance on securities issued in lieu of paying interest.

Loan relationships with embedded derivatives and options

See CFM37600 for guidance on securities that, in accordance with accounting standards, are ‘bifurcated’ (split) between the a ‘host contract’ (usually, the rights that entitle the holder to a return such as interest or discount), and an ‘embedded derivative’ (usually, the right to convert or exchange the security into shares, or which links the return to the value of an underlying asset.

Other special cases: ‘deemed loan relationships’

Note that CTA09/PT6 sets out rules for a number of other types of special case. These ‘deemed loan relationships’ include open-ended investment companies, unit trusts, offshore funds, building societies, industrial and provident societies, alternative finance, shares as debt, returns from partnerships, manufactured interest and repos, investment life insurance contracts. See the guidance at CFM40000.