General rule — distributions are not taxed under loan relationships rules

The general rule is that the credits and debits which must be brought into account under the loan relationships rules do not include credits and debits relating to any amount falling, when paid, to be treated as a distribution (CTA 2009, s. 465(1)). Such distributions remain within the scope of corporation tax under other legislative provisions by virtue of s. 465(2) and will therefore follow the general rule for distributions that all amounts paid on or after 1 July 2009 will be prima facie chargeable to corporation tax unless otherwise exempt (s. 931A(1)).

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