Write off of loan account

Write off of loan account

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Company with intercompany loan of c.£500k and bank loan of £1m and was sold to new owners. The new owners agreed to take on the bank loan with the £500k inter company to be written off.

I would like to enquire how this write off should appear on the p&l. Should it be shown as an exceptional item and what narrative should be used.

Secondly will this write off be taxable. I presume it will as the new owners are not connected to the company that the intercompany debt is due to.

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By User deleted
10th Oct 2011 21:49

Were the two companies connected ...

... prior to sale?

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