A company was in the process of acquiring a trading property but before final payment was made, company went into liquidation. Liquidators made their report to DTI regarding directors' conduct. DTI decided that no further action was appropriate against the directors.
Vendor initially sued company for final payment but as company was in liquidation, vendor pursued legal action against company directors personally. Considerable sums were paid in litigation costs by the directors and finally settled under arbritration.
Can these payments ie.litigation costs and the settled sum be treated as CG losses by the directors?
Keng
Keng Tan
Replies (2)
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Personal
This looks like the costs of personal defence fo a personal lawsuit action and no relevant chargeable asset on which the expenditure was spent nor any asset realised
hope this helps
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Not an easy question.
You would need to analyse the legal steps. The company was a debtor, and the Director is now spending money to prevent the origainal creditor -the Vendor-pursuing him.. What was the vendor's case?
The original debt was apparenly in connection with the comapny's trade- could you perhaps shoehorn the claim for CGT releif into TCGA s253-loans to traders?
Barrel scraping perhaps.