Commercial debt forgiveness
The commercial debt forgiveness rules are often overlooked in commercial transactions. In most (but not all) family dealings, the rules don’t apply as the “natural love and affection” exemption applies.
If an exemption does not apply, forgiving a commercial debt could have significant and adverse tax consequences for the person or entity forgiven.
This is particularly important in an insolvency context as the benefits of a debt being forgiven by a financial institution may be more than offset by the resulting change to the client’s tax position.Click here to enquire about commercial debt forgiveness