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HMRC internal manual

Capital Gains Manual

Losses: loans to traders: general

TCGA92/S253 (5) & (9)TCGA92/S253 (5) ensures that where a loss is deemed to accrue to a lender under Section (3), see CG65940, or to a guarantor under Section 253 (4), see CG66020, and the lender or guarantor recovers any part of the outstanding principal (or interest thereon in the case of a guarantee), there is a chargeable gain equal to the proportion of the loss corresponding to the amount recovered. See CG66080 as to what amounts `correspond to’ recoveries from co- guarantors.