Part 3Trading income

Chapter 4Trade profits: rules restricting deductions

55Bad debts

1

This section applies to non-money debts to which neither Part 7 (derivative contracts) nor Part 8 (intangible fixed assets) applies.

2

In calculating the profits of a company’s trade, no deduction is allowed in respect of a non-money debt owed to the company, except—

a

by way of impairment loss, or

b

so far as the debt is released wholly and exclusively for the purposes of the trade as part of a statutory insolvency arrangement.

3

In this section “non-money debt” means a debt which is not a money debt for the purposes of Part 5 (loan relationships).