Releasing loans before the settlement is finalised

[webberg]

Has anybody had success with writing loans off ?
Does the settlement payment need to complete before loan write-off can happen?

Q1, yes.

Q2. I've said many times before and again now.

A loan write off is taxable courtesy of section 554C(10(ab).

There are some complex rules about the value of the write off where the "same" amount has been previously taxed.

Clearly if the "same" amount has not been taxed before there is no mitigation.

If the "same" amount is from a year before the write off (logically inevitable) but the tax is not settled until AFTER the write off, is there a set off to ensure tax is paid only once?

I think there is a real danger that the answer is "no" and that you might pay tax twice.

Therefore unles you have settled and have it in writing that there is no further tax charge, DO NOT have a loan written off until you have that assurance.