We have a company that has a loan (asset) with a connected trust on which interest was charged. the company is considering to write off this loan account and we want to know whether there is something in the income tax act that would prohibit the company
Author: Peter Surtees
Important:
This answer is based on tax law year ending 28 February 2021.
Answer:
It is evident from your enquiry that you are familiar with the relevant provisions and their implications for both creditor and lender. So, there's no need to reproduce them here.
The short answer to your enquiry is yes, the company may carry out the cancellation of the loan, with the consequences that follow.