Commentary on Sections Overview Overview Section 320: Credits and debits treated as relating to capital expenditure
1081.This is the first of several sections which require debits and credits to be brought into, or not brought into, account for the purposes of this Part where normal accounting treatment is not followed. It is based on paragraph 14 of Schedule 9 to FA 1996. This section provides that a credit or debit which has been capitalised but which is in respect of a loan relationship is, in certain circumstances, to be brought into account.
1082.The words “for the purposes of corporation tax” in paragraph 14(2) have been rewritten in subsection (2) more narrowly as “for the purposes of this Part”, the wider purpose being unnecessary in this context.
1083.In subsection (6) “the interest component of the asset” is the interest element capitalised with the relevant asset.