Bad debt loss ( arms length transaction)My wife and I had invested in equity in a UK registered platform Ltd. company a couple of years ago via the HMRC’s EIS scheme. Around 18 months back, we also lent a substantial loan amount to the same firm on an unsecured basis for a said short term of 3 months, and then on for a further period of 5 months on the same terms. The firm has claimed that they are not in a position to payback this loan and have made an offer to convert this to equity - which we do not qant to accept as we cannot afford the capital loss - which has also resulted in our finance position gone into dire straits. So basically I wish to understand 2 scenarios Scenario 1) Not accepting the offer - Classifying this as a Capital Loss 1. Can I offset the capital loss against any type of income at my marginal tax rate?? 2. What do I need to prove to HMRC that this loan in irrecoverable? Scenario 2) Accepting the offer - Converting capital into equity and lets say the company is unable to resurrect and improve its financial position and the equity ( shares) reaches almost negligible value. 1. Can I offset the negligible va;ue share loss against any type of income at my marginal tax rate?? 2. What do I need to prove to HMRC that this loan in irrecoverable?