Valid from 07/05/2005
88DRestriction of deductions in respect of certain debtsU.K.
(1)This section applies to debts to which the following provisions do not apply—
(a)Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships, etc);
(b)Schedule 26 to the Finance Act 2002 (derivative contracts);
(c)Schedule 29 to that Act (intangible fixed assets).
(2)In calculating the profits of a company's trade for the purposes of corporation tax, no deduction is allowed in respect of a debt owed to the company, except—
(a)by way of impairment loss, or
(b)to the extent that the debt is released wholly and exclusively for the purposes of that trade as part of a statutory insolvency arrangement.
(3)In this section “debt” includes an obligation or liability that falls to be discharged otherwise than by the payment of money.
(4)In this section “trade” has the meaning given by section 6(4).