Where a deduction is claimed in respect of a debt which cannot
be paid or and brought to the UK because of exchange control
restrictions or because of a shortage of foreign currency in the
debtor's country, such debts are not bad or doubtful within the
meaning of ICTA88/S74 (1)(j). Neither is relief from tax available
for such amounts under ICTA88/S584 because the profits of the trade
of which they are a part do not arise outside the UK.
Relief may be given for such amounts under ESC/B38, subject
to the conditions in paragraph 5 of the concession being satisfied.
CT&VAT (Technical) will advise in cases of doubt or difficulty.
To the extent that such debts are covered by payments from
the Export Credit Guarantee Department, no deduction is allowable
(see IM4152).
