Corporation Tax Act 2009 section 330

Debits in respect of pre-trading expenditure

Section 330 allows a company to elect that certain non-trading loan relationship debits incurred before it starts trading can be reclassified as trading debits once the trade commences.

• A company that has a non-trading debit for an accounting period may elect, within 2 years of the end of that period, to prevent the debit being treated as a non-trading debit for that period.
• If the company starts a trade within 7 years after the end of the accounting period in which the non-trading debit arose, the debit can be redirected to the trade.
• The debit must be of a nature that, had it arisen in the accounting period when the trade started, it would have been brought into account as a trading debit for that trade.
• When both conditions are met, the debit is treated as arising in the accounting period in which the trade begins and is brought into account as a trading debit.