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On 24/04/2014, you requested the version in force on 24/04/2014 incorporating all amendments published on or before 24/04/2014. The closest version currently available is that of 13/08/2013.
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Deduction of bad debt, provision for doubtful debt and impairment loss
6.
—(1)  Any bad debt, provision for doubtful debt or impairment loss in respect of an approved syndicated offshore credit or underwriting facility or syndicated guarantee facility that is allowable as a deduction under the Act in any year of assessment to the financial institution or approved securities company that provided the facility, being the year of assessment relating to any basis period that is subsequent to the basis period in which the institution or company permanently ceases to provide any approved syndicated offshore credit or underwriting facility or syndicated guarantee facility, or any syndicated offshore credit or guarantee facility to which the corresponding Regulations apply, shall be deducted in the following manner:
(a)
for that year of assessment, against the following income of the institution or company and in the following order:
(i)
any income subject to tax at the rate of tax of 5%;
(ii)
any income subject to tax at a rate of tax other than 5% or the rate of tax specified in section 43(1)( a) of the Act;
(iii)
any income subject to tax at the rate of tax specified in section 43(1)(a) of the Act;
(b)
so far as the deduction cannot be allowed under sub-paragraph (a), for any subsequent year of assessment against any income of the institution or company referred to in sub-paragraph (a)(i), (ii) and (iii) and in the order specified therein.
(2)  Section 37B of the Act shall apply, with the necessary modifications, to a deduction under sub-paragraphs (a) and (b) of paragraph (1) as if the bad debt, provision for doubtful debt or impairment loss available as a deduction under those sub-paragraphs were unabsorbed losses of the institution or company in respect of income subject to tax at the rate of tax of 5%.
(3)  Section 37(12) to (17) of the Act shall apply, with the necessary modifications, to a deduction under sub-paragraphs (a) and (b) of paragraph (1) as if the bad debt, provision for doubtful debt or impairment loss available as a deduction under those sub-paragraphs were a loss incurred by the institution or company in a trade or business.
(4)  Where —
(a)
any bad debt or provision for doubtful debt has been allowed as a deduction to a financial institution or an approved securities company under paragraph (1)(a) or (b); and
(b)
the bad debt or any part of it is subsequently recovered or the provision or any part of it is subsequently written back,
then the amount of the bad debt recovered or provision written back shall be deemed to be income derived by the institution or company in the basis period in which the bad debt is recovered or the provision written back and chargeable to tax at the rate of tax of 5% for the year of assessment relating to that basis period.
(5)  Where —
(a)
any impairment loss has been allowed as a deduction to a financial institution or an approved securities company under paragraph (1)(a) or (b); and
(b)
the impairment loss or any part of it is subsequently reversed and such reversal is recognised under FRS 39,
then the amount of the reversal shall be deemed to be income derived by the institution or company in the basis period in which the reversal is made and chargeable to tax at the rate of tax of 5% for the year of assessment relating to that basis period.
(6)  Where —
(a)
a deduction has been allowed under paragraph (1)(a) or (b) to a financial institution or an approved securities company for the year of assessment relating to any basis period (referred to in this paragraph as the initial basis period); and
(b)
the institution or company derives exempt income in any basis period subsequent to the initial basis period (referred to in this paragraph as the subsequent basis period),
then an amount equal to the lower of the following shall be deemed to be income derived by the institution or company in the subsequent basis period and chargeable to tax at the rate of tax of 5% for the year of assessment relating to that basis period:
(i)
the amount of the deduction allowed under paragraph (1)(a) or (b), less any amount or amounts deemed to be income of the institution or company by virtue of one or more earlier applications of this paragraph; and
(ii)
the amount of the exempt income derived in the subsequent basis period.
(7)  In paragraph (6), “exempt income” means income that is exempt from tax under regulation 3(2), or regulation 4(1) of the corresponding Regulations.