Corporation Tax Act 2009 section 298

Meaning of trade and purposes of trade

Section 298 defines what it means for a company to hold a creditor relationship for the purposes of a trade, and excludes certain mutual business activities from being treated as a trade.

• A company holds a creditor relationship for trade purposes only if the relationship arises from activities that are an integral part of that trade.
• Mutual trading, mutual insurance, and other mutual business (excluding life assurance) are not treated as a trade or part of a trade for loan relationships purposes.
• This exclusion of mutual activities extends beyond this Part to any other legislation that feeds amounts into the loan relationships rules.
• For basic life assurance and general annuity business, a corresponding exclusion is made separately under section 88 of Finance Act 2012 for the purpose of applying the I minus E rules.