Trading receipts in taxation
The profit and loss account must be scrutinised to ensure that profits or receipts which are not taxed as a trading receipt are excluded from the calculation of the assessable trading profit. Items which normally need to be eliminated include the following: The loan is being repaid at an amount less than the outstanding amount of the loan. That shortfall is IMHO either compensatory in nature (for a trading profit that might otherwise have arisen), and so taxable as trading income, or it is a discount, either taxable as trading income, or as investment income under S.381 ITTOIA 2005. Trading in depositary receipts, exchange-traded funds, certificates, similar financial instruments and shares other than those admitted to trading on a regulated market takes place in largely the same fashion, and fulfils a nearly identical economic purpose, as trading in shares admitted to trading on a regulated market.