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Can I claim this unpaid loan as a capital loss?

Posted 8 November 2016 under Tax Q&A


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Mark says:
7 November 2016 at 17:55

I made a loan of R25 000 to a family member, which I will not be able to recover. I understand that I cannot claim this as a bad debt. Can I claim this unpaid loan as a capital loss and would there be any effect in terms of reducing my taxable amount?

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TaxTim TaxTim says:
8 November 2016 at 10:07

Claiming loss to a family member is seen as a type of capital loss that is to a connected person and SARS would not allow this to be used to reduce taxable income. Arms length loans are allowed to be claimed. Furthermore capital losses are ring fenced into future years as a loss cannot be used to set off against taxable income, but carried forward to future years.


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