I'm looking into claiming a loss for a client on the balance of a loan (£100K) to a trader (TCGA 1992 s.253) whose business is failing but has not yet failed. The lender considers the loan is now irrecoverable because the actions taken by the borrower to improve profitability have been unsuccessful. The borrower managed to recover a significant part of the original loan in 2015/16 after the borrower downsized his house and business. I am satisfied that the other various conditions are met for the loan to qualify for CGT relief but am concerned that, while the borrower still owns a house which, if sold, should realise just about enough to repay the loan, HMRC may argue that the loan is not irrecoverable. The lender would not wish to put the borrower and family out onto the streets. Has anyone any experience of HMRC's views on irrecoverability of loans in such circumstances?