Part 5

Loan Relationships
Chapter 1

Introduction

How profits and deficits from loan relationships are dealt with

Calculation of non-trading profits and deficits from loan relationships: non-trading credits and debits
301
1
Whether a company has non-trading profits or a non-trading deficit from its loan relationships for an accounting period is determined in accordance with subsections (4) to (7), using the non-trading credits and non-trading debits given by this Part for the accounting period.
1A
In the case of a non-UK resident company, subsections (4) to (7) need to be read with section 5(3), (3A)(b) and (3B)(b) (territorial scope of charge to corporation tax).
2
In this Part—
a
“non-trading credits” means credits for any accounting period in respect of a company's loan relationships that are not brought into account under section 297(2), and
b
“non-trading debits” means debits for any accounting period in respect of a company's loan relationships that are not brought into account under section 297(3).
3
But see also—
a
section 330 (debits in respect of pre-trading expenditure), and
b
section 482(1) (under which credits or debits to be brought into account under Chapter 2 of Part 6 (relevant non-lending relationships) are treated as non-trading credits or debits).
4
A company has non-trading profits for an accounting period from its loan relationships if the non-trading credits for the period exceed the non-trading debits for the period or there are no such debits.
5
The non-trading profits are equal to those credits, less any such debits.
6
A company has a non-trading deficit for an accounting period from its loan relationships if the non-trading debits for the period exceed the non-trading credits for the period or there are no such credits.
7
The non-trading deficit is equal to those debits, less any such credits.
Pt. 5 modified (with effect in accordance with reg. 1(2)(3) of the amending S.I.) by The Taxation of Regulatory Capital Securities Regulations 2013 (S.I. 2013/3209), regs. 1(1), 11(3)-(6)
Pt. 5 applied (with modifications) (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 990(5), 1184(1) (with Sch. 2)
Pt. 5 modified by 2010 c. 4, s. 356NB(1)-(4) (as inserted (1.4.2014) by Finance Act 2014 (c. 26), Sch. 16 paras. 4, 6)
Pt. 5 modified by 2007 c. 3, s. 809FZZ(9) (as inserted (with effect in accordance with s. 37(4) of the amending Act) by Finance Act 2016 (c. 24), s. 37(2))
Pt. 5 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)
Pt. 5 modified by 2010 c. 4, s. 356NC(1)-(4) (as inserted (1.4.2014) by Finance Act 2014 (c. 26), Sch. 16 paras. 4, 6)
Pt. 5 modified (30.9.2013) by The BRB (Residuary) Limited (Tax Consequences) Order 2013 (S.I. 2013/2242), arts. 1, 7
Pt. 5 modified by 2010 c. 4, s. 676AG(1) (as inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 75)
Pt. 5 modified (1.4.2012) by Budget Responsibility and National Audit Act 2011 (c. 4), s. 29, Sch. 4 para. 2; S.I. 2011/2576, art. 5
Pt. 5 applied (with effect in accordance with Sch. 24 paras. 13-16 of the amending Act) by Finance Act 2009 (c. 10), Sch. 24 para. 15(2)(3)
Pt. 5 modified (15.11.2011 for specified purposes, 30.3.2012 for E.W.) by Localism Act 2011 (c. 20), ss., 240(5)(o), Sch. 24 para. 5; S.I. 2012/628, art. 3(b)
Words in s. 301(1) substituted (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 15(2), 35 (with Sch. 5 para. 36)
S. 301(1A) inserted (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 15(3), 35 (with Sch. 5 para. 36); and substituted (6.4.2020) by Finance Act 2020 (c. 14), Sch. 6 paras. 1, 10