Ken Moody finds no specific HMRC guidance on the procedure for claiming a capital loss when money lent to a trader becomes irrecoverable and suggests practical solutions.
Relief for a capital loss on a loan to a trader may be claimed by the lender (under TCGA 1992 s 253), where the money has been used wholly for the purposes of the trade, but the debt has ‘become irrecoverable’.
An odd feature of TCGA 1992, s 253 is that, unlike claims for tax reliefs generally, section 253 contains no time limit for making a claim. Instead, for the purposes of section 253, the capital loss is deemed to
