Treatment of a loan made to an assoicated company which has now been struck off.

Treatment of a loan made to an assoicated...

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I've inherited a slightly unusual situation (to me anyway):

Company A made a loan to Company B of just under £2,000 in the year ended 31 March 2009 (it was basically a bank transfer to provide working capital for Company B). Due to a change in circumstances, Company B never actively traded and the few assets etc were disposed off at a small loss. Company B has now been struck off in the year to 31 March 2011 but the loan is still showing as a debtor on Company A's balance sheet.

1) Can the loan be written off to the P&L in Company B accounts?

2) Am I right in assuming the write-off doesn't qualify for tax relief?

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By tax for fun
21st Aug 2011 19:55

loan

As the loan is clearly bad then it should be written off.  don't think there will be any tax relief as the loan does not appear to have been made for the purpose of the trade.

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