Commentary

D7.821 Loan relationships

Corporate tax
Corporate tax | Commentary

D7.821 Loan relationships

Corporate tax | Commentary

D7.821 Loan relationships

The loan relationships legislation covers all forms of corporate debt relationships.

The main effect of the loan relationships legislation on a building society itself is that profits (or losses) on gilts and other securities that are held as liquid assets are taxed (or allowed) as they accrue.

The loan relationships regime is discussed in detail in Division D1.7. Outlined below are some of the issues that may, however, be of particular relevance to building societies.

Computation of trading income—General

Profits from loan relationships to which a building society is a party for the purposes of its trade are included as taxable trading profits, and profits from other loan relationships are included as taxable non-trading credits (see D1.701)1. A building society is a party to a loan relationship when it stands either as creditor or debtor for a money debt, and that debt arises from the lending of money2. Profits and losses (credits and debits), including interest received and

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