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Inter-company loan w/off tax treatment

I'm looking for some advice on the corporation tax treatment writing off an inter-co loan

Didn't find your answer?

Any guidance you can offer will be gratefully received.  I have posted annonemously due to the high sensitivity of the topic at work at the moment.

Company A has loaned Company B roughly £200,000 in order to help the company start up and pay salaries etc over the course of 2 years.  

100% of the shareholders & directors of Company A own and 90% of the shares in Company B, and make up most of the board of directors of Company B.  

Company B has been deemed unsuccessful and unmanagable.  Company B has to be shut down and has made a loss for the entire of it's life.  That decision to shut it down is final.  

In writing off the irrecoverable loan of £200k from Company A to Company B, can Company A then offset the write off against taxable profits for calculating corporation tax?

Any help you can give me would be grately appreciated.  I've done some reading and have found some conflicing information.

Many thanks in advance.


Replies (3)

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By Matrix
23rd Jan 2020 12:37

Have you looked at s348 CTA?

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Replying to Matrix:
By Dib
23rd Jan 2020 12:55

Better to start with s466 CTA 2009 and HMRC's interpretation of s466(2)(c)

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Replying to Dib:
By Wilson Philips
23rd Jan 2020 14:15

And depending on conclusion move onto sections 441-442 and HMRC’s interpretation thereof.

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