Non trade loan relationships

[rajpal_bal]

Hi,

I have an issue where Company A (UK resident) lent money to Company B (non UK). Interest has been accrued on the NTLR but not yet paid. Company A now wishes to waive the interest (settlement of loan will either be from the issuance of shares or, settled at a later date by cash).

How is the interest treated in Company A? Is the waiver tax deductible? Also, given we are recognising debits and credits in the p&l (interest accrued but not yet paid - credit, and the interest write off- debit) do the 2 just net each other off?

thanks.