The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:
Special rules apply to tax benefits provided by a close company to a participator. The general rule taxes certain benefits in kind and is discussed below. However, if the general rule does not apply but value has been extracted from the company through tax avoidance arrangements, the targeted anti-avoidance rule may well apply.
Where a shareholder is an employee or director of a close company, any benefits he receives are taxed under the earnings rules. Therefore, in the absence of any special rules where shareholders are not directors or employees, they would not pay any tax on benefits they receive. CTA 2010, s 1064 treats those benefits as net distributions paid to those shareholders. The net amount is calculated using the normal benefit rules for earnings.
This applies to any expense incurred by the company in connection with the provision of living or other accommodation, entertainment, domestic or other services or other benefits or facilities of whatever nature.
The following are not included:
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