Part 4: Income tax, corporation tax and capital gains tax Section 32 and Schedule 7: Loan relationships and derivative contracts Summary
Section 32 introduces Schedule 7, which implements a package of proposals to modernise the corporation tax rules in the Corporation Tax Act (CTA) 2009 governing the taxation of corporate debt ('loan relationships') and derivative contracts. The main areas of change are:
	clarifying the relationship between tax and accounting;
	basing taxable loan relationship profits on accounting profit and loss entries;
	new ‘corporate rescue’ rules to provide tax relief where loans are released or modified in cases of debtor companies in financial distress; and
	new regime-wide anti-avoidance rules for both loan relationships and derivative contracts.
	The changes will generally take effect for accounting periods commencing on or after 1 January 2016. However, the corporate rescue rules will apply from 1 January 2015 and the new anti-avoidance rules will apply in respect of arrangements entered into on or after the date of Royal Assent to Finance (No2) Act 2015.