GIM5080 - Taxation of the investment return: use of trading losses against investment income

Investment income is an integral part of the trading profit ( GIM5010).

A corollary of this is that ICTA88/S393 (8) applies to some investment income, which would fall to be treated as part of the trade profits but for the exclusivity of the Schedules (see GIM5030).

On a carry-forward claim under section 393, the investment income can be treated as trading income against which trading losses incurred in an earlier period may be offset.

As section 393(8) applies only to interest and dividends which have been charged to tax otherwise than as trade profits, its only practical application is likely to be to foreign dividends before 1 April 2001 as dividends from UK companies are not charged to corporation tax.