B2.410 Bad debts and related sumsBad debts and income taxNo trading deduction is available in respect of any debt except where the debt is: • bad • estimated to be bad, or • released by the creditor wholly and exclusively for the purposes of the trade as part of a statutory insolvency arrangement1A debt is estimated to be bad if the debtor is bankrupt or insolvent. However this does not apply to the extent that an amount can reasonably be expected to be received on the debt2. A deduction for bad or doubtful debts is to be made against trading profits in the year in which the debt becomes bad or doubtful. For release of debts, see B2.206. These provisions do not apply where profits are
No trading deduction is available in respect of any debt except where the debt is:
• bad
• estimated to be bad, or
• released by the creditor wholly and exclusively for the purposes of the trade as part of a statutory insolvency arrangement1
A debt is estimated to be bad if the debtor is bankrupt or insolvent. However this does not apply to the extent that an amount can reasonably be expected to be received on the debt2. A deduction for bad or doubtful debts is to be made against trading profits in the year in which the debt becomes bad or doubtful. For release of debts, see B2.206.
These provisions do not apply where profits are
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