Corporation tax relief for loss on investment

zephyr Registered Posts: 24 New contributor 🐸

Could anyone please advise or point me in the right direction?

My client ltd company (Company A) invested in another company in which they owned 70% of share capital - total share capital £100.

Company A then loaned £82K for working capital

Unfortunately the new company dissolved in less than 12 months, with losses. The loan of £82k will not be repaid.

My query is - I am in the process of preparing the year end accounts for Company A, and need to write off the loan. Am I correct in thinking the loan is classed as a capital gains loss, and corporation tax relief will only be giving if relieved against capital gains in the same year or carried forward to relieve against any future capital gains and not against trading profit?

Any help would be gratefully received.

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