The Loan Cancellation Letter is a crucial document used in Dutch financial and business practice when a lender decides to formally forgive a debt obligation. This document is particularly relevant in situations involving debt restructuring, financial hardship, corporate reorganizations, or strategic business decisions. Under Dutch law, the letter must clearly specify the details of the original loan being cancelled, the extent of the cancellation, and any conditions attached to the debt forgiveness. The document needs to comply with the Dutch Civil Code (Burgerlijk Wetboek) and financial regulations, particularly regarding contract termination and debt forgiveness. It may have significant tax implications for both parties, as debt cancellation can be considered taxable income under Dutch tax law. The letter serves as official evidence of the debt cancellation and protection for both parties in future legal proceedings.

1. Letter Header: Date, recipient's name and address, reference numbers

2. Loan Reference: Details of the original loan agreement including date, parties, and amount

3. Cancellation Declaration: Clear and unambiguous statement of loan cancellation

4. Effective Date: Specification of when the cancellation takes effect

5. Mutual Release: Statement releasing both parties from further obligations

6. Confirmation Request: Request for countersignature or acknowledgment if required

7. Closing and Signature: Formal closing, signature block for authorized representative