Forgiveness

With regard to query 17 441 Loan forgiving I would just take up a couple of issues with regard to New Road’s comprehensive reply.

First the loan cannot simply be ‘forgiven’ but would need to be released by deed or it is still legally due in which case while I am not an accountant I doubt if there should be any credit to profit and loss if Mr X simply decides not to request repayment of the loan.

However it is not quite right that ‘all profits from a loan relationship are taxable’ because CTA 2009 s 322 lists certain circumstances where no credit need be brought into account.

Reference should also be made to CTA 2009 s 444 (‘Transactions not at arm’s length’). This basically says that if a ‘related transaction’ is not at...