Writing off related party loans
A client has one succesful business and several unsuccessful businesses. Successful Company loaned money to Unsuccesful Company B, C, D and E, all of which have now gone in to liquidation. B C and D all had the same director and shareholder of Successful Company A so the money written off in A is not tax deductable but what about the money written off for Company E.
The Directors of A was a 1/3 shareholder of E and one of three directors. Some six months prior to its liquidation he resigned as director and gave his shares to his sister. He did this as the bank was trying to assosiate the two companies. Now when the money was written off is it tax deductable?