|
A Very Taxing Day said:
“
I am a student member but have been asked a question by a friend. They have a relative who is ceasing to trade very soon in his retail business. They were wondering what the position will be with the business loan that still has 5 of its 10 years left to run. They are not in a financial position to pay it off from the business but want to know whether is is possible to claim tax relief on all the outstanding interest due in the final accounts?
Can anyone help?
I have tried to find the answer via a helpsheet from the HMRC website but have had no luck.
”
My first thought is that the rest of the loan might be called in if they cease to trade, especially if it was a business loan rather than a personal one. Add to that, that they will remain committed to the terms of the lease for the property they are trading from (some leases can be a total of 25 yrs long) and they would do much beter to try and sell a going concern than just cease to trade with all the hassle and cost involved.
I don't know what the tax relief situation would be, you need someone with more knowledge than I currently possess. but hopefully that should give you a starting point for checking of leases etc to see what committments they would have hanging over them.
Good luck with the research
Theresa
|
