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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Losses: loans to traders: payments under guarantee: general

TCGA92/S253 (4)TCGA92/S253 (4) provides relief for certain payments made by guarantors of qualifying loans to traders, where the payments are made under the guarantee in consequence of the loan having been irrecoverable from the borrower. The loan must have been

  • of money
  • used wholly for the purposes of the borrower’s trade, (trade includes profession or vocation for these purposes) which does not consist of or include the lending of money


  • used for the purposes of setting up the trade, provided the trade is actually carried on subsequently
  • made to a borrower resident in the UK.