HMRC has published guidance on the amendments introduced in Finance Act 2009 to the late interest rule for accounting periods beginning on or after 1 April 2009. FA 09 inserted new conditions applying respectively to cases where the creditor is a ‘connected company’, a close company participator or a ‘major interest’ company. In each case the new condition is that the late interest rule will only apply where the creditor is a company that is ‘resident’ in a ‘non-qualifying territory’.

The Guidance outlines HMRC's interpretation of key definitions, transitional rules and how the new provisions apply to multi-investor partnerships.

The guidance on FA 2009 changes to loan relationships rules on late-paid interest between connected companies is reproduced below at 2.06.