Is an inter company loan account write off taxable?

Is an inter company loan account write off...

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His sole trader business is a restaurant and some years ago he set up a Ltd Co to do marketing and general advertising business, part of which was to market his own sole trader business and the remainder doing other business activities. The Ltd company had invoiced for work carried out over the years and the sole trader claimed the costs in his accounts. Correspondingly this was classed as income in the Ltd Co accounts. However the Ltd company ended up failing and was owed money from the sole trader business. It was eventually dissolved.

Question:

a)In the sole trader business, as the loan is to be wriiten off will this be classed as taxable income via the P&L or not?

b) If any of the loan was made up of pure loans then could these just be wriiten off to without any tax implications:?

thank you for any help

Replies (5)

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By User deleted
18th Jan 2013 17:09

Inter company loan?

Where is the second company?

(That's a rhetorical question by the way - just venting my annoyance at improper use of the word 'company')

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By cde123
18th Jan 2013 18:56

No second company -two businesses, one a sole trader and one his own Ltd Co..

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By ShirleyM
18th Jan 2013 20:22

Shouldn't this be written back?

However the Ltd company ended up failing and was owed money from the sole trader business.

If the sole trader business has claimed tax relief on expenditure that was never actually paid, shouldn't this be reversed, as you would with a bad debt on sales?

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By User deleted
18th Jan 2013 21:05

OR ...

... is it overdrawn DLA?

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By jack-jones
18th Jan 2013 21:06

overdrawn directors current account with all those tax implication!?

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