Two friends (A and B; not related or married), run a company together (company X). Company X is owned 72% by A and 28% by B. Each of the friends also has their own companies, of which they are the sole director and shareholders. A's personal company loans B (as an individual, not his company) £13,000. A now wants to write this loan off in her company accounts and for B to not have to repay it to her company. Does this become some form of taxable income for B? 

Arthur Weller replies:  

B has no tax liability. He is neither a shareholder nor a director or employee of the company that lent him the money. Regarding whether A has any tax liability, it is true that B is a 'business partner' of A, but that does not make him an 'associate' of A. See HMRC’s Internal Company Taxation manual at CTM60150 . However, there may be an inheritance tax liability when A’s company writes off this loan. See HMRC’s internal Inheritance Tax manual at IHTM14851.