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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15915
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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, If someone makes a loan to someone to start or fund a business,

Customer Question

Hi, If someone makes a loan to someone to start or fund a business, is the lender able to claim any Tax or Capital Gains relief, for that, or any future years ?
Does the answer change if the company fails ?
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

If you lend money to somebody else to start or fund a business, there is no tax relief available for that loan I'm afraid. If you borrow money to start your own business, you could claim tax relief for the interest you pay on the loan.

If you lend money to a business and it fails, you may be able to claim a capital loss if the criteria in HS296 here are met. The loss can only be offset against capital gains.

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

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