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Rakhi Vasavada
Rakhi Vasavada, Financial Advisor
Category: Finance
Satisfied Customers: 4545
Experience:  Attorney and Financial Expert. Have specialization in Financial Laws.Practice experience of over 13 years
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I was a director of a company that closed. I had to pay personal

Resolved Question:

I was a director of a company that closed. I had to pay personal guarantees to some suppliers and the Bank when the company closed. I am now selling a property that I own and will have capital gains tax to pay on it. My accountant says I can't claim relief on the money that I am repaying for the personal guarantees, is this correct ?
Submitted: 3 years ago.
Category: Finance
Expert:  Rakhi Vasavada replied 3 years ago.
Dear Friend,

Hello and welcome. Thank you for providing an opportunity to assist you.

I would beg to differ from your accountant. In capacity of the director, you in effect put money into the company to pay off the bank, and on the basis that the company is not able to make any repayment on that loan, a capital loss is due.

On similar lines, a director's loan account, which cannot be repaid on insolvency is available for relief against capital gains tax only.

So, to sum up, I feel you CAN claim relief on the money that you are repaying for the personal guarantee from what I understand from your situation.

I would suggest you to have second opinion on this from another local accountant.

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Warm Regards,
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