CFM41030 - Deemed loan relationships: money debts other than discounts: trade debts: impairment
Trade ‘bad debts� are within loan relationships rules
‘Business paymentsâ€� are payments that would be taken into account as a receipt of a trade, or a UK or overseas property business carried on by the company. If a debt arises because such a business payment has not been made, any impairment loss sustained by the creditor is dealt with under the loan relationships rules. »Ê¹ÚÌåÓýapp same applies if the creditor wholly or partly reverses the impairment provision, and brings a credit into account.
This rule applies to periods of account beginning on or after 1 January 2005 and has the effect of applying the loan relationships regime (including the connected party rules) to ‘bad debtsâ€� arising in a trade or a property business. »Ê¹ÚÌåÓýapp previous legislation at ICTA88/S74(1)(j) was repealed for periods of account beginning on or after 1 January 2005.
CFM41040 has more on impairment losses arising on trade debts within the loan relationships rules.