CTA09/S444(6) makes it clear that CTA09/S447-452 and not S444 applies to exchange gains and losses.

CTA09/S447-452 is intended to apply primarily to

borrowings by a thinly capitalised UK company (there is a full discussion of thin capitalisation in the International Manual, INTM560000+), and

loans made by a UK company to an overseas subsidiary which fulfil an equity function.

The rules apply in four situations.

Where a company has a debtor loan relationship, and interest (or other outgoings or losses) on the debt are either wholly or partly restricted for tax purposes under the transfer pricing provisions of TIOPA10/Part 4 (CTA09/S447CFM38530).

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