Does my client qualify for CGT Loss?

Does my client qualify for CGT Loss?

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My clients invested around £300K by injecting these funds into a limited company, to buy a restaurant in 2008 by remortgaging their houses.

In 2010, the restaurant caught fire and the insurance company (resposible for the loss of business and equipment) refused to deal with the claim with the usual excuse that they were still investigating...eventually refusing the claim after 3 years for various reasons which I wont go into.

It took the landlords insurance 18 months to deal with the buildings insurance claim, handing back my client an empty shell premises. 

My clients did not have the funds to refit the restaurant with furniture and equipment, and decided to sell the lesehold premises for £5K

My question is, the 2 directors each have a directors loan account balance of £150K with no hope of it ever being repaid.

Are my clients entitled to claim a CGT loss ? Or any other relief ?

If so, under what legislation would they be able to claim any relief ?

Thanks

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Portia profile image
By Portia Nina Levin
17th Sep 2014 19:59

Yes

TCGA 1992, section 253.

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