Tax relief on UK debts

If you've lent some money to someone and they've failed to repay it - you should consider the CGT implications. In particular you want to be looking at whether you can crystallise a capital loss that can be used to offset against other current and future capital gains (on property or shares for example). Loans can be made to an unconnected company but in many cases are made either to a family member or to their company. It may even be the case that you don't even actually make the loan but could be made to pay up as a guarantor for the loan. Most debts are classed as 'simple debts' which means they are exempt from CGT. In other words there is no taxable gain on a transfer of a debt but similarly no capital loss if the debt becomes irrevocable. However there are a number of exceptions to this - particularly as regards losses and guarantee payments. Members can find out more in this article on When can you avoid CGT and get tax relief on UK debts