CFM33240 - Loan relationships: the matters and computational rules: amounts not brought into account: amounts written off government investments

CTA09/S326

Write off of government investments

Where a company is a party to a debtor loan relationship as a result of the government lending it money out of public funds, and the debt is written off, under CTA09/S326 the company is not required to bring into account the credit arising from the release. This is because other legislation, in CTA10/S92 and S94, Case 1, restricts the company’s losses by the amount written off (CTM04400). This is one of the few occasions when other legislation overrides the loan relationships legislation.

You will come across this most often in cases involving large government or PFI contracts.