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HMRC internal manual

Corporate Finance Manual

Loan relationships: a short guide: how are taxable amounts brought into account?

How are they taxable?

The key distinction is between ‘trading’ and ‘non-trading’ loan relationships.

Trading amounts are taxable and relievable as part of trading profits and losses. No computational adjustments will be necessary.

Non-trading credits are taxable as ‘non-trading credits’ together with credits relating to non-trading derivative contracts.

Non-trading deficits are either

  • carried forward to set against the non-trading credits of subsequent accounting periods, or
  • subject to a claim

    • set against any other profits arising in the same accounting period, or
    • set against non-trading credits arising in the immediately preceding accounting period, or
  • surrendered as group relief.