"Non-trading loan": UK tax. In relation to borrowing, non-trading loans are when the proceeds of loans are used to acquire items which are not part of the companyâ€™s trade. For a non-financial trading company, non-trading items would include investments in the shares of other companies. In relation to lending, non-trading loans are when it is not the company's trade to lend money. For a non-financial trading company, almost all lending - if not all lending - would be a non-trading item for UK tax purposes. The tax treatment of non-trading loans is generally less favourable for the taxpayer, compared with trading loans. This is mainly to do with the ways in which gains and losses may be offset with more flexibility in relation to trading items.