Corporation Tax Act 2009 section 297

Trading credits and debits to be brought into account under Part 3

Section 297 explains how loan relationship credits and debits are treated when the loan relationship is held for the purposes of a company's trade.

• Credits from a trading loan relationship are treated as trade receipts when calculating the trade's profits for the accounting period.
• Debits from a trading loan relationship are treated as deductible trade expenses in calculating those profits.
• The deductibility of debits overrides certain general restrictions, including those on capital expenditure, the wholly and exclusively rule, and patent royalties.
• Specific exceptions apply for pre-trading expenditure, relevant non-lending relationships (which are treated as non-trading), and certain ring-fence petroleum extraction activities.