The government's stated aim in the current consultation document, Modernising the taxation of corporate debt and derivative contracts, is to provide simpler and fairer tax treatment, minimising the scope for abuse, reducing uncertainty and improving structural and legislative clarity as well as reducing administrative burdens. Given the lack of detail in the consultation document, it is difficult to say whether the objectives will be met, although there are a number of areas of concern.A loan relationship is defined as a money debt arising from a transaction for the lending of money. While 'money debt' is defined, there is no definition of 'lending of money' in the legislation, so some clarification would be welcome. The consultation document clearly states: 'Nothing in this document is intended substantively to change the effect of the existing definitions of what constitutes a loan relationship.' This is a pity as it is an area ripe for reform.
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