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Form of election under S330 Corporation Taxes Act

My client made an election under S330 CTA for the period ended 31 December 2015, in ............

My client made an election under S330 CTA 2009 for the period ended 31 December 2015, in December 2017. The election was as follows:-

We hereby elect under Section 330 of the Corporation Tax Act 2009 for the non-trading loan relationships debits in respect of the year ended 31 December 2015 to be treated as a debit for the accounting period in which the company begins to trade and to be brought into account in accordance with section 297(3) of the Corporation Tax Act 2009 (trading debits).

The non-trade relationship debits for the year ended 31 December 2015 amounted to £x,xxx.

Unfortunately, due to a late amendment to the Return and the amendment being overlooked, the figure quoted was incorrect. HMRC has rejected the election because of this.

Having reviewed S330, I'm not sure that quoting the figure was needed and therefore does the fact that it was quoted invaildate the election?

Thank you.

Replies

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14th Mar 2018 10:21

Tricky one, in theory I guess it was an incorrect (and therefore invalid) election but I agree that an argument is available on the basis that you state. Id suggest its worth a letter setting out the position and hoping for some kind of reasonable response.

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By Ruddles
14th Mar 2018 10:52

Not one I've had to consider before, but my interpretation is that in making the election one needs to identify the debit and I'm struggling to see how you could do that without stating the amount.

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By ms998
14th Mar 2018 15:35

Both the legislation and HMRC manuals (https://www.gov.uk/hmrc-internal-manuals/corporate-finance-manual/cfm32100)refers to "a" debit. I would argue that the election applies to the debit regardless of the amount.

It appears to be an all or nothing election?

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By Ruddles
to ms998
14th Mar 2018 17:24

You've got 3 debits in your accounts of £3k, £7k and £22k.

You only want/need to elect for the £7k debit. How would you identify that in your election? ("I wish to make a s330 election - for the debit that is not £3k or £22k"?)

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15th Mar 2018 09:01

Thanks for the replies. Definitely worth a letter then.

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