Loan relationship deficits
In this lesson, you'll learn how to identify and calculate non-trading loan relationship deficits, a key concept in corporation tax that often appears in ATX exams.
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In this lesson
- 0:00 Non-trading loan relationship deficits explained
- 0:47 How to calculate net position and relief options
- 2:55 Worked example: Nimbus Limited calculation
- 3:40 Relief strategies and carry-back provisions
About this lesson
We'll walk through what qualifies as a non-trading loan (interest on loans for investments or late-paid tax, for example), how to net off debits and credits, and when you have a deficit versus income. You'll then discover the relief options available: offsetting against total profits in the current year, carrying back against non-trading income from the previous 12 months, or carrying forward to future years—with the flexibility to choose both the amount and timing of relief. Using a worked example with Nimbus Limited, you'll see how to distinguish between trading and non-trading interest in a real scenario, calculate the deficit accurately, and explain the relief strategy to secure marks in your exam.
Duration: 5m
Transcript
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