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D1.715 Loan relationships—relevant debits and credits

For accounting periods beginning on or after 1 January 2016 the amounts that are brought into account in respect of a company's loan relationships are¹:

1. Ìý

   •ÌýÌýÌýÌý profits and losses of the company (whether of a revenue or capital nature²) that arise to it from its loan relationships and related transactions (excluding interest or expenses)

2. Ìý

   •ÌýÌýÌýÌý interest under those relationships and

3. Ìý

   •ÌýÌýÌýÌý expenses (see below) incurred by the company under or for the purposes of those relationships and related transactions

Profits and losses for these purposes include exchange gains and losses so arising³.

The requirement for profits and losses to 'arise from' a company's loan relationships or related transactions was considered in Hexagon Properties Ltd⁴. A credit on release of a debt owed by the company did not arise from the loan relationship because it was part of a settlement with the bank for mis-selling and represented the netting-off of the company's claim for damages.

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