In C J Wildbirds Food Ltd v HMRC [2018] TC06556 the First Tier tribunal agreed that a loan which could not be repaid and was written off by the lender was a loan relationship and a deduction was allowed for the impairment debit.

A Loan relationship  is created when a company is a debtor or creditor in respect of a money debt which arose from a transaction of lending money. 

C J Wildbird Foods Ltd (CJW) made a series of loans totalling over £1.5m to a company operating a birdwatching and ornithology website. At the same time it took a 50% shareholding in the company.

The FTT  found that the amounts were loan relationships and allowed the appeal:

The judge concluded that CJW’s business judgement in continuing to make the loans may have been “overly optimistic” but that HMRC’s disagreement with that judgement was irrelevant to the underlying nature of the transaction.


Not many appeals on topic come to the tribunal and perhaps following this case some firms might take a little more interest on the rules. We have some really good guides on the topics which summarise the essentials for you.

Our links

Loan relationships

Loan relationships toolkit: is a balance within the rules?

Losses: trading and other losses


C J Wildbirds Food Ltd v HMRC [2018] TC06556



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