I have been reading previous posts in relation to debt forgiveness and would appreciate if someone could clarify the tax treatment.
For example, a property investment company in financial difficulties has had it's properties sold off by a receiver on behalf of a lender and accumulated significant capital losses on the disposals. After a period of time, the bank has fully realised their security and makes the decision to forgive the shortfall in their debt. The write off is a taxable non trade loan relationship gain for the company. By the time the bank's decision is taken, the company makes the gain in a later accounting period and would be liable for CT on the NTLR gain, as the capital losses forward cannot be offset. Is this correct?