Loan to trader - s.253 relief

Loan to trader - s.253 relief

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Director lends £50k to his new property development company. A little of the cash is used for business expenditure, but the lion's share is used to pay the salary of the other (unconnected) director. Although some income was generated the hoped-for major deals never took off and the company is effectively bust (1 year after incorporation). Director therefore wishes to claim relief under TCGA 1992 s.253. Is Inspector likely to argue that funds were not used for trade purposes? (I am assuming that there is no difficulty in arguing that loan was fully recoverable at the outset)
David Lochhead

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By Sarah Salton
11th Jun 2012 12:15

i have a similar issue and wondered if you ever received any comments/assistance on this?

 

thanks

 

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