Introduction Overview Overview Section 286: Restriction on debits to be brought into account
976.This section modifies the loan relationship rules in the case of a ring fence trade. It is based on section 494(2) and (2A) of ICTA.
977.The section ensures that non-trading debits from a company’s loan relationships cannot be set against the company’s ring fence profits, unless the loan relationship represents money borrowed to finance oil extraction activities or to acquire oil rights. The loan relationship rules are in Parts 5 and 6 of CTA 2009.
978.Subsection (5)provides that where a non-trading debit is restricted in this way the legislation allows the company to have relief for the debit against other profits.