SCHEDULES
SCHEDULE 20Taxation of hybrid capital instruments
PART 2Corporation tax, income tax and capital gains tax
13Commencement for purposes of corporation tax
1
If there is a difference between—
a
the tax-adjusted carrying value of a transitional qualifying instrument which is an asset or liability at the end of an accounting period ending on 31 December 2023, and
b
the tax-adjusted carrying value of that instrument at the beginning of the 2024 period,
a credit or debit (as the case may be) of an amount equal to the difference must be brought into account for the purposes of Part 5 of CTA 2009 for the 2024 period in the same way as a credit or debit which is brought into account in determining the company’s profit or loss for that period in accordance with generally accepted accounting practice.
2
For the purposes of this paragraph “tax-adjusted carrying value” is to be construed in accordance with—
a
section 465B of CTA 2009 (tax-adjusted carrying value in relation to the asset or liability representing a loan relationship), and
b
section 702 of CTA 2009 (tax-adjusted carrying value in relation to a contract).
3
Where in the 2024 period, in accordance with generally accepted accounting practice, the rights and liabilities under the transitional qualifying instrument have been treated as divided between—
a
a loan relationship, and
b
one or more derivative financial instruments or equity instruments,
the reference in this paragraph to the tax-adjusted carrying value of the transitional qualifying instrument means the sum of the tax-adjusted carrying values for each of those component instruments.
4
In sub-paragraph (3) “equity instrument” has the meaning it has for accounting purposes.