Waive Directors Loan credit balance
A director has a loan account showing £100k credit balance in his company.
The company is showing historical losses b/f although the company is in fact profitable.
The director believes the losses and his loan account were created by some creative accounting by his previous accountant.
He wishes to waive the amount owed to him as he does not believe the company actually owes him this money and the company is having problems obtaining credit with suppliers due to the negative balance sheet.
If the loan account is written off how is this treated in P&L?
What if any are the tax implications?