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HMRC internal manual

Corporate Finance Manual

HM Revenue & Customs
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Other tax rules on corporate debt: group mismatch schemes: meaning of economic profit or loss

CTA10/S938F sets out what is meant by the economic profit or loss for the purposes of the group mismatch rules. It refers to a profit or loss being made by members of the scheme group taken together over the period of the scheme and taking into account:

  • profits and losses made as a result of the Corporation Tax Acts; and
  • any adjustments required to reflect the time value of money.

The term ‘profit’ or ‘loss’ in this context has its ordinary commercial meaning - real profits and losses and not just accounting entries.