An associate of mine has lost money by way of a personal guarantee to a bank which was called in when his son's business failed. Is this allowable for CGT purposes? The son was a sole trader.
there is a diposal,
a debt is deemed to be an asset for cgt purposes.
the father appears to have purchased the debt from the bank for whatever he amount he handed over to the bank.......for cgt purposes that would be his base cost
should he then fail to recover the debt from his son he has incurred a capital loss as he has recived no consideration for his asset. if he does recover the debt in full then its a no gain no loss situation