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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4203
Experience:  FCCA FCMA CGMA ACIS
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My wife and I own 60% of a family company for which I have

Customer Question

My wife and I own 60% of a family company for which I have guaranteed the overdraft facility. The company will probably go bust in the foreseeable future and I will obviously loose the sum guaranteed. We have had no financial return from this company for 12 years.

My question is can I offset this loss against any future capital gains?

Arthur preston
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello Arthur, I'm Keith and happy to help you with your question.

I am pleased to be able to tell you that this is indeed the case. Here is the advice from Scotdebt.com:

'Guarantee Payments

Capital gains tax relief is available in respect of guarantee payments made to third parties in connection with monies lent to UK traders'

You have 4 years in which to claim this loss which can be done on your annual self assessment tax return. There is a possibility that you may be able to claim the loss against income as this is an unquoted trading company and a family business to boot. I suggest that you should have a look on the web for 'What to do if you've made a loss' and up will come HMRC's chapter and verse on the subject which I am sure you will find a very helpful guide. If you are also an employee of the company you can definitely have the income offset. I was the employed secretary on a modest stipend of a company which went to the wall and I got all my investment allowed as described, no problem. Remember that a director of a company is an employee of that company per se.

You would, of course, have to utilise some of the loss which will crystalise in the tax year the company finally folds against any personal taxable capital gains made in that year but otherwise the loss made can be carried forward.

I do hope I have been of some assistance in this matter.
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Expert:  bigduckontax replied 3 years ago.
Thank you for your support.
Customer: replied 3 years ago.


Perfectly satisfied, thank you. Arthur
Expert:  bigduckontax replied 3 years ago.
Delighted to have been of assistance.