Dream on, trade off

YOUR CLIENT HAS lent money to a private trading company perhaps with dreams of a National Insurance-free stream of interest as his reward. Unfortunately the company goes bust and you advise your client to claim relief for the loss under TCGA 1992 s 253 ('Relief for loans to traders'). The client is not too happy because he does not expect to make any significant capital gains in the foreseeable future but he accepts that what you advise is making the best of a bad job. You put in the claim and the client then has a capital loss which he can carry forward ad infinitum; not much more to it than that. Or is there?

Very basically capital loss relief is available under s 253(3) for a loan to a trader which has become irrecoverable and where the borrower and the lender were not each...