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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4434
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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Do you know anything about pik loan notes- where the interest

Resolved Question:

Do you know anything about pik loan notes- where the interest is capitalised-
where there is part dispsoal which is siad to be trade falt and the final dispsoal- which incudes capitalised interest- these laons are with pedalgreen plc
Submitted: 5 years ago.
Category: Finance
Expert:  Rakhi Vasavada replied 5 years ago.

Dear Friend,

 

Yes, I know.. But what exactly is your question ? Kindly elaborate so that I can help..

Warm Regards,

Customer: replied 5 years ago.
Hello Rakhi

We have a client who purchased pik loan notes- in Pedalgreen PLC
say he purchased for 2 million- he sold 1 million and then he sold the balance.
We were told he traded flat when he sold the first 1 million and no interest.
Now he has sold the balance of 1 million and the proceeds are 93% this includes capitalised interest,

I want to know how if the difference is treated as interest or is it capital gains.
If it is interest when is it taxable - is it on part disposal or on the final disposal.
Thank you for your help.

Expert:  Rakhi Vasavada replied 5 years ago.

Dear Friend,

 

To the best of my knowledge, it is treated as interest.

 

Warm Regards,

Customer: replied 5 years ago.
Please confirm if it is treated as interest- when is this taxable- is it on part disposal or on final disposal.

When the proceeds are 93% it will aslo create capital loss so are we allowed to carryforward this loss.

Thank you for your help.
Expert:  Rakhi Vasavada replied 5 years ago.

Dear Friend,

 

I confirm, to the best of my knowledge, it is interest and on final disposal. It will create a capital loss and it will be allowed to carry forward.

 

I hope this helps...

Warm Regards,

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