Commentary

C3.705 Irrecoverable loans to traders—subsequent recovery of loan or sum paid under guarantee

Capital gains tax
Capital gains tax | Commentary

C3.705 Irrecoverable loans to traders—subsequent recovery of loan or sum paid under guarantee

Capital gains tax | Commentary

C3.705 Irrecoverable loans to traders—subsequent recovery of loan or sum paid under guarantee

Where a qualifying loan (see C3.703) is made to a trader and subsequently becomes irrecoverable (see C3.703A), it may be possible for either1:

  1.  

    •     the lender to make a claim for an allowable capital loss on the amount of the loan that is irrecoverable, or

  2.  

    •     the guarantor to make a claim for an allowable capital loss on the amount of the payment made under the guarantee in relation to the irrecoverable loan (see C3.703B)

For a discussion of the conditions that must be met to claim the allowable loss, see C3.704.

It is possible that after the loss has been claimed, the lender may recover some or all of the loan from the

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