Corporation Tax Act 2010 section 730

Meaning of "relevant non-trading debit"

Section 730 defines what counts as a "relevant non-trading debit" for the purposes of restricting loan relationship debits following a change in company ownership.

• A relevant non-trading debit is one that falls into any of three categories, all of which must be calculated on an amortised cost basis of accounting
• The first category covers debits on deeply discounted securities held by connected or close companies, where recognition has been postponed until redemption but would otherwise have been recognised before the ownership change
• The second category covers debits relating to late interest between connected parties, where the interest is treated as not accruing until paid but would otherwise have been recognised before the ownership change
• The third category is a residual one, catching any other non-trading debit on a debtor relationship of the company that relates to an amount which accrued before the change in ownership