The basic rule is that a person who is owed money ‘disposes’ of an asset (the debt) whenever repayment or satisfaction of the debt is made, or when he assigns, etc. the debt to a third party. However, no chargeable gain or allowable loss accrues to the disponor (or his personal representative or legatee: see ¶62760) if the disponor was the original creditor.
Edward makes an unsecured loan of £8,000 to his sister and later accepts £6,000 in full satisfaction. As Edward is the original creditor, no allowable loss arises.
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