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Posted Tue, 03 Jan 2023 14:34:24 GMT by savvysps
Hi there, We (me and my wife) made a Loan Note investment (UK company) couple of years ago on which we were due to receive principle and interest on maturity last year. This interest would have been treated as income and hence taxable under UK tax rules. Now unfortunately the company got dissolved during last year and we end up losing all our principle amount as well as did not got paid any interest payments on top. Our question is how do we show and adjust our losses (principle + interest) in self assessment and get rebate against income tax? Our understanding is that as the interest payments from the investment were to be treated as taxable income, any losses as part of this investment should also be adjusted against income tax. Would really appreciate your help in this regard - thanks.
Posted Thu, 26 Jan 2023 10:46:57 GMT by HMRC Admin 19

The first point to consider is whether the investment is via qualifying corporate bond (QCB) or non qualifying QCB. The following guidance defines what a QCB is and how to establish whether a security can come within the meaning of a QCB as defined in section 117.  

CG53702 - Qualifying corporate bonds: general definition

You need to analyse the characteristics of both the security and the underlying debt. You can see guidance here:

CG53705 - Qualifying corporate bonds: definition - normal commercial loan

The guidance below will provide guidance on losses.

HS227 Losses (2022)

Thank you.

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