Commentary

D6.656 Profit extraction from family companies—loans written off

Corporate tax
Corporate tax | Commentary

D6.656 Profit extraction from family companies—loans written off

Corporate tax | Commentary

D6.656 Profit extraction from family companies—loans written off

Prohibitions in the Companies Act do not inhibit directors from taking loans from their companies. In fact, such loans are common. Indeed there is an attitude of mind with some family company proprietors that the company is an extension of their banking facility. Accordingly, there is specific tax legislation to penalise the process. Without this, there might be no need for a remuneration policy at all; a system of permanent loans would suffice.

The legislation is in CTA 2010, s 4551, and concerns participators rather than directors. In the family company, the individual

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