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Loan write off - taxable?

Loan write off - taxable?

Investment company in UK have received a loan from an unconnected party.

The company is going into liquidation with the loan still outstanding. If the loan is written off in the final accounts the company will make a profit and I believe the company will have made a non-trade loan relationship gain which will give rise to a tax bill.

Is it possible to not formally write the loan off and leave it as outstanding on the final accounts. Therefore no profit for the final return.  Then let the company going into liquidation with the loan outstanding. Or will this just give rise to tax as part of the liquidation process.

Thanks in advance for any helpful answers


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By pembo
20th Dec 2011 11:24


Unless there is a binding agreement between the parties that the loan has been waived or otherwise satisfied then it remains outstanding in the final accounts and statement of affairs and should not be recognised in the P&L. The liability will be dealt with by the liquidator in the normal manner during the course of the liquidation.

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