Dealing with loan relationships

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Dealing with loan relationships by Mind Map: Dealing with loan relationships

1. [What are debits and credits?](https://library.croneri.co.uk/po-heading-id_i9Q1yFh0_kSzvxpvSd8FyA)

1.1. Amounts

1.1.1. Interest paid and received

1.1.2. Expenses

1.1.3. Profits

1.1.4. Losses

1.2. Debit = expense/loss

1.3. Credit = income/profit

1.4. Tax follows accounts

1.4.1. Exceptions in special cases

2. [How are debits and credits taxed?](https://library.croneri.co.uk/po-heading-id_7Lf5YcNU4Eu76qsO9hvVIQ)

2.1. Purpose of loan

2.1.1. Trade

2.1.1.1. Part of trade income

2.2. Non-trade

2.2.1. Pooled to give non-trade profit/deficit

2.3. Unallowable purpose

2.3.1. No relief for debits

3. [Advising the client](https://library.croneri.co.uk/po-heading-id_WqikhdysNU--yCtrTsn0_Q)

4. [Do the rules apply?](https://library.croneri.co.uk/po-heading-id_q4mZTmfwj0-RedCmPUSHdQ)

4.1. Loan relationship

4.1.1. Money debt

4.1.2. Debtor or creditor

4.1.3. Transaction for lending of money

4.2. Relevant non-lending relationship

4.2.1. Money debt

4.2.2. Debtor or creditor

4.2.3. Not transaction for lending of money

5. Special cases

5.1. [Connected and interest paid late](https://library.croneri.co.uk/po-heading-id_LEhO8UxbIkCc4brc9AnYOQ)

5.1.1. Test

5.1.1.1. Close company & participator

5.1.2. Interest paid >12m from YE

5.1.3. Relief on paid basis

5.2. [Connected company](https://library.croneri.co.uk/po-heading-id_YLfHiHetJEmoqu5gv_iJKg)

5.2.1. Test

5.2.1.1. Control

5.2.2. Use amortised cost

5.2.3. Impairments not taxed/relieved

5.3. [Groups](https://library.croneri.co.uk/po-heading-id_v_oO4aTGkUaiLDJwsfa0NQ)

5.3.1. Test

5.3.1.1. 75% direct

5.3.1.2. 51% indirect

5.3.2. Transfers at NGNL

5.3.3. Degrouping charge

5.4. [Loan to participator](https://library.croneri.co.uk/po-heading-id_OnyutC6B4E-7_ksblCnKeQ)

5.4.1. No relief for write off

5.5. [Interest-free & low interest loans](https://library.croneri.co.uk/po-heading-id_fv3YfjSJE0qYZ_jl2OPB5g)

5.5.1. PV and amortised cost

5.5.1.1. Not if small and loan from director shareholder

5.5.1.2. Tax rules to prevent asymmetry

5.5.1.3. Not if repayable on demand