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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15933
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Seeking a second opinion on this one just to ensure support

Customer Question

Seeking a second opinion on this one just to ensure support for answer.I had a business with someone. We closed down the business and all funds were extracted from it, tax was fully paid up on funds taken from the business. Post the business closure we agreed that some money was owing between us. This was to settle a couple of item across the business term relating to who had taken what funds form the business. The person will now make a payment to me. That payment is from funds that taxes have been fully paid on. This payment is effectively to pay of a private debt, no tax is due on it. Its not a gift, its the repayment of an agreed debt. I do not need to pay tax on it and there is no were to declare it on a SA return and its not required to be.
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.

Hi.

From what you have said, its a private debt and not a business debt so if that is repaid there are no tax implications. If interest is paid, that will be taxable.

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

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