I have a client who is a has received a loan into their limited company from a family member. The family member has said they are not looking for this loan to be re-paid.
The issue the client is facing is that they are trying to tender for local gov't contracts/work and need their balance sheet to look better. The options I can think of are writing off the loan and transferring it to P&L if this is permissible, but what are the tax implications?
Or second option, is to transfer the credit balance to 'other reserves'. I'm not sure if this is permissible and if so what are the disclosure requirements?
Any comments would be appreciated even if just to point me in the right direction.