The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
The following guidance note provides details of queries raised on loans to participators in the last few years in the Readers’ Forum section in Taxation magazine with a link to the full replies. It should be noted that the response to the queries is at a point in time and all relevant legislation should be confirmed as being currently applicable.
We have been approached by a new client who, with his wife, owned a property company that owned just one property. The couple had £278,000 of share capital divided equally between them. In January 2020, the property was sold and after the payment of corporation tax the company was left with £400,000 in the bank. Unfortunately, my client was unaware that he could not just wind up a company with more than £25,000 in assets under the capital gains tax rules. In March 2020, the couple withdrew all the money from the bank and the registrar of companies was requested to strike off the company in September 2020. This would obviously be problematic if the £400,000 was treated as a distribution. My suggestion is to treat the withdrawal as a directors’ loan account, have the company reinstated and then arrange for a members’ voluntary liquidation, setting the loan against the proceeds on the liquidation. My concern is that we have to draw up a balance sheet at 30 September 2020 and this will show a directors’ loan account. If the courts do not agree to reinstate the company because the only reason for doing so is to benefit the shareholders and not the company itself, then we could be faced with a balance sheet showing a debtor which could fall into the hands of the Crown as bona vacantia. Is my idea sound? Is there a risk of losing the whole sum or are there any
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionConsortium relief enables losses of a consortium company to be transferred to consortium members in proportion to the consortium member’s interest in the consortium company, and vice versa. Consortium relief is a flexible relief which is available in several different scenarios which are
Current year relief and carry back lossesCurrent year relief for trading lossesTrading losses can be offset against total profits of the same period. Total profits covers, for example, chargeable gains or non-exempt dividends.The maximum claim for relief is the lower of the available loss or the
This guidance note covers measures in place to allow taxpayers to defer VAT payments as a result of pressures faced due to the coronavirus pandemic.For an overview of the impact of coronavirus on VAT more broadly, see the Coronavirus (COVID-19) and VAT ― overview guidance note.See also the CIOT
The corporate interest restriction (CIR) essentially limits the amount of interest expense a company can deduct from its taxable profits if the interest expense is over £2 million. The actual mechanics of the CIR calculation are highly complex (the legislation is over 150 pages long) and are
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.