Overview of non-trading deficits

When a company’s debits on its non-trading loan relationships and derivative contracts in an accounting period exceed the credits on its non-trading loan relationships and derivative contracts in the same period (the deficit period), the surplus is a special category of loss which is known as a non-trading deficit (NTD).

This guidance note considers how companies can utilise their NTDs.

For guidance on determining a company’s debits and credits from loan relationships and whether these are trading or non-trading, see the Taxation of loan relationships guidance note.

Relief for non-trading deficits against current year profits

Companies can claim for NTDs to be offset against other profits of the same period. Relief is given after the automatic set off of any trading losses brought forward, but only where those trading losses arose prior to 1 April 2017. Trading losses brought forward that arose on or after 1 April 2017 do not have to be automatically offset against future trading profits (see the Trading losses carried forward guidance note). Relief for the NTD