When can losses on shareholders' loans be claimed as a CGT loss / tax deduction
The loss can only be recognised when the loan is actually legally written off. The company should ideally be put into liquidation or shut down.
The loss cannot be recognised under para 56 unless the company applies the provisions of para 12A and s19 of the Income Tax Act.
For further information please read the portion on para 56 and the meaning of disposal in the CGT Guide at: (https://www.sars.gov.za/faq/faq-how-do-i-distribute-capital-losses-in-a-trust-as-a-net-loss-to-beneficiaries/lapd-cgt-g01-comprehensive-guide-to-capital-gains-tax/).