My client (a limited company) owes a long standing debt (around £60k). The lender is prepared to forgive the debt The company could then cancel the liability and replace the loan with a capital reserve. I fearl that this treatment might generate a taxable capital gain..
Alternatively can I issue non voting shares to the lender in settlement of his debt? Would this solve the capital gain problem as well as clean up the Balance Sheet?
John O'Brien