I am after some guidance, if I may..
Client has received a refund from the bank on a loan (where the banks paperwork was drafted incorrectly, so they have refunded the loan interest charged over the period). Said loan was used to fund a property portfolio and, the loan interest (previously paid) has been included in the b/f property losses.
The refund is fully taxable but where is it disclosed? Would it be included as a credit in the loan interest payable within the property pages or separately disclosed as other income received - eg interest? If included within property pages, it would utilise the b/f property losses. This seems the most obvious place but am not sure it is actually where it should go. ie is it now treated as income seperate from the property portfolio? If it is included within Investment income, it would be fully taxable and the b/f property losses would continue to carry forward (property portfolio is now profitable), so would be utilised in next couple of years (ie won't be stuck).
Has anyone had anything similiar?
Thanks in advance for any comments.