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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Losses: loans to traders: other conditions for relief

FA96FA96 made substantial changes to the taxation treatment of debts held by companies, see CG54000+. The broad effect, where the rules apply, is that any profit or loss on the redemption or other disposal of a debt, as well as any interest, is charged, or allowed, within the income regime.

Where the outstanding amount of the principal on a debt became irrecoverable on or after 1 April 1996, relief under TCGA92/S253(3) will only be available if the loss does not fall to be taken into account under the FA 1996 rules.