Capital Gains Tax and Debts

Hi, I refer to the guidance of HS296 Capital Gains Tax and Debts (2023) in respect only this situation. It notes that a loss on a loan made to a trader may be allowable if the loan is irrecoverable and that loans may include credit balances on a director’s loan account but not ordinary trade debts. My situation is a sole director and 100% shareholder-owned business. The director loaned funds to the company to keep up with operating expenses meeting the criteria of "uses the money wholly for the purposes of a trade". The business was then struck off with the director being owed £4,000 as a director's loan. I am happy the closure of the business makes the loan irrecoverable. Can the director make a capital loss claim in relation to the unpaid director's loan? Thanks

Hi tompalmer,

If you meet all the conditions detailed on the HS293 under the section Loans that Qualify, then yes you can make a claim.

Thank you.
 

Based on the information provided, it appears that you may be able to make a capital loss claim in relation to the unpaid director's loan if the business has been struck off, and you believe the loan is irrecoverable. However, tax regulations and guidelines can vary by jurisdiction and may change over time. To get a definitive answer and guidance on your specific situation, it is advisable to consult with a tax professional or HM Revenue & Customs (HMRC) in the UK, as they can provide specific advice based on the current tax laws and regulations in your area.