Loan Forgiveness Letter Template for New Zealand

The Loan Forgiveness Letter is a crucial document used in New Zealand when a lender decides to formally cancel a borrower's obligation to repay a debt. This document is commonly used in various situations, such as family loans, employer-employee loans, or commercial debt restructuring. The letter must comply with New Zealand's Credit Contracts and Consumer Finance Act 2003, Income Tax Act 2007, and other relevant legislation. It serves as official documentation of the lender's decision to forgive the debt, protecting both parties' interests and providing necessary documentation for tax and accounting purposes. The document typically includes detailed information about the original loan, the amount being forgiven, and any conditions attached to the forgiveness. It's particularly important in New Zealand's legal context as it can have significant implications for both parties' tax positions and financial statements.

1. Letter Header: Date, sender's details, recipient's details, and reference number of the original loan

2. Loan Identification: Clear identification of the original loan agreement including date, parties, and amount

3. Current Loan Status: Statement of the current outstanding balance and any accrued interest

4. Forgiveness Declaration: Clear and unequivocal statement of the debt forgiveness, including the exact amount being forgiven

5. Effective Date: Specification of when the loan forgiveness takes effect

6. Legal Implications: Brief statement about the legal effect of the forgiveness and release of obligations

7. Signature Block: Space for lender's signature, name, title, and date