CG53471 - Debts which are not debts on a security: original creditor
TCGA92/S251 (1)
A debt which is not a debt on a security (and not treated as a debt on a security, see CG53442) will not give rise to any chargeable gain when it is disposed of by the original creditor.
The same treatment applies to a disposal by the personal representative, or legatee, of the original creditor.
Losses
On normal capital gains principles, where a gain would not be a chargeable gain, a loss would similarly not be an allowable loss (TCGA92/S16 (2) ). However, there is specific legislation, at TCGA92/S253, which deems allowable losses to arise in certain circumstances where loans to traders have become irrecoverable. If a loss on a debt will not be allowable, on normal principles, you may need to consider whether this legislation can apply - see CG65900C.