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HMRC internal manual

International Manual

HM Revenue & Customs
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Controlled Foreign Companies: Assumed Taxable Total Profits, Assumed Total Profits and the Corporation Tax Assumptions: Shares Accounted for as Liabilities

The shares accounted for as liabilities rules (CTA09/S521C) provide that, unless certain exceptions are met, any shares accounted for as a liability will be taxed as though they are a liability. Hence, any return from those shares will be taxed within the loan relationships regime at CTA09/Part 5.

TIOPA10/Part 9A/S371SQ ensures that references to a tax advantage at CTA10/S1139(2)(da) include any tax advantage arising under CTA09/S521E(4) as a consequence of the CFC being party to an arrangement that falls within the shares accounted for as liabilities rules at CTA09/S521C.