Part 3

Trading income
Chapter 4

Trade profits: rules restricting deductions

Bad debts
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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).