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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
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Debts which are not debts on a security: 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 CG65900+.