The points below from case law and HMRC’s guidance may be relevant to your situation.

Case law

A debt is released where another person takes on the liability for repaying the debt from the original debtor (the twin cases of Collins v Addies (HMIT); Greenfield v Baines (HMIT) [1992] BTC 532; see also HMRC guidance at SAIM 5200);

In Esprit Logistics Management Ltd & Ors [2018] TC 06517, the First-tier Tax Tribunal found that there was no release of a loan for the purposes of ITTOIA 2005, s. 415; the release of the loan was merely the mechanism for the payment of earnings. This case concerns a tax planning scheme – the loan waiver scheme – marketed by Tenon Ltd.

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