Introduction Summary
1.Section 41 and Schedule 20 amend the corporation tax rules on loan relationships that apply to connected parties. In certain circumstances, these rules restrict the tax deduction for interest or discount payable on a loan or security, until the interest is paid or the security is redeemed. Under the amended rules, where the connected party to which the interest or discount is payable is a company, such a restriction will be made only where the company is located in a “non-qualifying territory”. The change applies for accounting periods beginning on or after 1 April 2009.