Define U and b outside function to which you pass them.
Define L.
%--INPUTS------------------------------------------------------------------
%
% U - upper triangular matrix
% b - column vector
%
%--OUTPUT------------------------------------------------------------------
%
% b - solution x of Ux=b, stored in b
%
% Define U and b outside of function.
U=[1 2 3; 4 5 6; 7 8 9];
b=[1;2;3];
% Call function
b = myBackwardSubstitution(U,b);
function b=myBackwardSubstitution(U,b)
d=size(U,1);
for i=1:d
for j=i+1:d
% You haven't defined L
b(i)=b(i)-L(i,j)*b(j);
end
b(i)=b(i)/L(i,i);
end
end
