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HMRC internal manual

Capital Gains Manual

Losses: loans to traders: payments by co- guarantors

Where a loan has been guaranteed by a number of persons, and the guarantee is called in by the lender, the amount of relief any person can claim under TCGA92/S253 (4) is the amount he or she has paid less any contributions payable to him or her by the co-guarantors. This will be so whether the lender has approached all of the guarantors for payment, or only some of them. If the guarantor pays more than his or her `share’, he or she acquires rights to recover the excess from his or her co-guarantors. Subject to the further comments in CG66031 - CG66032, no relief should be given for any such excess amount, see the example at CG66072. There is no capital gains charge on the guarantor when he or she obtains contributions from co-guarantors which had been taken into account in restricting the guarantor’s claim, see CG66040 - CG66041.