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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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AS a director of a company some years ago I loaned some money

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AS a director of a company some years ago I loaned some money and deposited £15,000 to cover a bank overdraft. I ceased to be a director some years ago.
The company has now failed and my loan stood at £12,500 and the bank have taken my £15,000. Is there ant relief for the £27,500 that I have lost?
Max Bayes
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

The only thing that you can do is to claim a capital loss for the £27,500 loan you made to the company. Take a look here for more information on that. I'm afraid that you cannot claim income tax relief for the loss of the loan. You need to register the loss with the tax office within four years of the end of the tax year in which is was incurred in order to be able to utilise it in later years unless you are claiming to utilise it against capital gains of an earlier year in which case you still need to make a claim.

If you had or have shares in the company, you may be entitled to income tax relief for the loss of your investment. The qualifying criteria are set out in HS286.

I hope this helps but let me know if you have any further questions.





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