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Summer Finance Bill: Corporate rescues

The summer Finance Bill includes a suite of new reliefs for ‘corporate rescues’. These provide increased flexibility to both third party lenders and corporate borrowers as to how to achieve a tax neutral debt restructuring in a corporate rescue situation.
Measures in the Bill seek to ensure that corporate borrowers shall not have taxable income from an actual or ‘deemed release’ of a liability under a loan relationship in corporate rescue situations provided there is significant financial distress.  
The proposals are expected to provide flexibility in effecting tax neutral debt restructurings particularly with the introduction of FRS 101 and FRS 102 where accounting credits are more likely to arise compared to old UK GAAP.
A fundamental requirement...

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