Non trading loan relationships

noodles
noodles Registered Posts: 308 Dedicated contributor 🦉
edited June 18 in AAT member discussion
What sort of things would you treat within this. I have been reading up on it and it says that bank arrangement fees are non trading.

Interested to know what other people treat within this and your thoughts to it.

Comments

  • stevo5678
    stevo5678 Registered Posts: 323
    In practice i havent come across it often. We never show bank costs there. I think its more for investments and loan write offs.

    Most arrangement fees are for finance of trade assets.
  • JJH1969
    JJH1969 Registered Posts: 110 Epic contributor 🐘
    If the money was borrowed to fund trading activities it is a trading loan relationship and treated as a tarding expense. If money is borrowed to fund a non trading activity i.e the purchase of an investment or a let property it is a non trading loan relationship. Bank deposit interest is always treated as a non trading activity as it is received as investment income. Also any interest charged by HMRC on underpaid tax is non trading.
  • noodles
    noodles Registered Posts: 308 Dedicated contributor 🦉
    Thank you.

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