Relief under TCGA 1992, s. 253 (see ¶511-150 ) is available for a payment under a guarantee for a loan which would itself qualify for relief, or which would have done so but for being a debt on a security (see ¶511-200 ). In Dennis [2019] TC 06868, it was held that a payment made pursuant to a provision in a shareholders’ agreement that provided for any loss suffered on the winding up of the company to be re-allocated between the shareholders in proportion to their voting rights was an indemnity not a guarantee, therefore no relief was available.

The payment may be to the lender or a co-guarantor (TCGA 1992, s. 253(4)(b)).

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