D1.750 Impairment relief for loan relationships
The legislation described in this article only relates to liabilities under a loan relationship. Relief for bad and doubtful debts which do not constitute loan relationships (see D1.703) can only be allowed as trading deductions (see B2.410), a loss from a UK or overseas property business (see B6.203) or as a capital loss (under TCGA 1992, s 253, see C3.701–C3.705). HMRC has confirmed that, whilst trade debts are not loan relationships1, trade 'bad debts' are within the loan relationships rules2.
For specialised expert commentary on impairment losses and corporate restructurings see Ghosh Johnson and Miller on the Taxation of Corporate Debt and Derivatives, Chapter D5.
Relief for impairment losses
Where a company accounts for a loan relationship on an amortised cost basis and it is not connected with the other party to the loan relationship for the purposes of CTA 2009, s 466, it is able to claim relief for any impairment losses or losses arising from the release of all or part of the debtor
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