Commentary on Sections Part 10: Miscellaneous income Overview Section 970: Rule restricting deductions for bad debts
2456.This section deals with bad debts arising from the holding of an office. It is based on section 88D of ICTA.
2457.The corresponding rule about trade debts is in section 55.
2458.This section is needed because section 88D(4) of ICTA imports the extended meaning of “trade” in section 6(4) of ICTA. So the ICTA rule applies to a vocation and also to an office or employment. In this Act, for corporation tax purposes a company cannot carry on a vocation or be employed.
2459.Subsection (1) excludes from the rule any debts that are dealt with by the loan relationship rules in Parts 5 and 6 of the Act. Section 88D(1) of ICTA also excludes debts that are dealt with by the rules for derivative contracts and intangible fixed assets. Those rules are not relevant to an office-holder and so are not mentioned in the section.