Simon Groom provides a refresher guide to the rules.
Speed read: A loan relationship arises when there is the lending of money. Interest payable on trading loans is deducted from trading profits income. Interest payable on non-trading loans (eg interest on a loan to buy an investment property) is deducted from non-trading profits (LR). Interest receivable will be treated as non-trading profits (LR) in most cases. Non-trading debits and credits are pooled — if the non-trading debits exceed the non-trading credits then loss relief is available for the resulting deficit. A non-trading deficit can be set off against other income in the current year group relieved carried back or carried forward. Special rules apply for connected parties.
Definition of a loan relationship
A loan relationship is any...
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Simon Groom provides a refresher guide to the rules.
Speed read: A loan relationship arises when there is the lending of money. Interest payable on trading loans is deducted from trading profits income. Interest payable on non-trading loans (eg interest on a loan to buy an investment property) is deducted from non-trading profits (LR). Interest receivable will be treated as non-trading profits (LR) in most cases. Non-trading debits and credits are pooled — if the non-trading debits exceed the non-trading credits then loss relief is available for the resulting deficit. A non-trading deficit can be set off against other income in the current year group relieved carried back or carried forward. Special rules apply for connected parties.
Definition of a loan relationship
A loan relationship is any...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
