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D1.739 Taxation treatment of loan relationship debits and credits

A loan relationship may be held or owed by a company for the purposes of a trade which it carries on or a company may have no trade or has the relationship for an investment or non-trade purpose. The credits and debits of trading loan relationships are treated differently to those of non-trading loan relationships (see below). In addition, the rules relating to non-trading loan relationships changed with effect for accounting periods beginning on or after 1 April 2017. For details of the position before 1 April 2017, see D1.740. Note that the pre-1 April 2017 rules continue to apply to charities after 1 April 2017. Details of relief for overseas tax is also discussed below, and note that non-trading loan relationship credits are taken into account in computing a company's profits for corporation tax purposes even where the loan has a foreign source.

For details of the taxation treatment of non-lending relationships see D1.743.