Loan Write Off & CT1

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Hi there,

We settled our loan with the bank for a reduced amount. Could someone please shed some light on where/how to account loan write off amount in CT1 (Corporation tax return)? Where does this go in "Extracts from Accounts" on CT1?

Thank you!
 
How have you treated it in the accounts?

What does your accountant think?

What was the loan granted for?

Was it the write off of interest or the capital element?
 
Accounts are not completely finalized yet, but I'm putting this under profits. I guess it is a profit after all, although I'm having some doubts filling CT1 now. Loan was used to finance operations so no asset purchase is involved. The settlement was made against full amount outstanding (including any interest due) so not sure how to separate interest but I guess I'll just leave it out as whole amount as it's not a huge amount. I don't mind putting this under profits, as the company has substantial losses that this can be offset against, but I wanted to see if perhaps somebody else has different opinion how this should be recorded. Thanks
 
if the loan was used for working capital/operations, then any write off will be taxable. However, almost be definition, you should have enough taxable losses carried forward to set off against it.

From an accounting perspective, if it is a material amount it should be recorded as an Exceptional Gain.

Jim Stafford
 
just a quick follow up on this - where exactly in Extracts from Accounts on CT1 this amount should be recorded? Thanks again
 
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