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Readers’ forum: Loan

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22 June 2021
Issue: 4797 / Categories: Forum & Feedback
Gift of loan and treatment of chargeable gains.

My client has sold an asset into a trading company at market value with the consideration left outstanding as a loan. There are no particular terms for the loan and it is not a debt on a security.

The shares in the company are held by a discretionary trust. If my client were to gift the loan to his son and the company make repayments of the loan to his son over a period of time would TCGA 1992 s 251(4) apply to the repayments of the loan such that a chargeable gain arises on his son?

If so would the base cost of the loan to the son be the actual value of the loan at the time of the gift in accordance with s 17(1)(a) such that the chargeable gain is nil? Section 17(2) which states that s 17(1)...

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