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Tax relief for loans made to traders
With the continued lock downs of Covid-19 it is unfortunate that some people who lent money to a trader may not be able to recover it. If the trader goes bankruptcy or into liquidation then there could be some relief by treating the lost money as a capital loss. This loss can be offset against capital gains of the same year or carried forward against any future gains. The main point to note is that there is only a four year time period, from the end of the tax year of the loss, in which to make the claim. You may be thinking that you wouldn’t have any future gains but what if in later years you purchased a second property and then sold this sometime later crystallising a capital gain?
Always make the claim and don’t delay in calling us to assist you