A company director has withdrawn money from the company during the year ending 31 March 2011. I expect that when the accounts are calculated the amount withdrawn will probably be less than the companies profits. However, as profits have not yet been calculated and a dividend has not been declared would this be treated as a directors loan?
Many thanks
DBTL
Replies (2)
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Yes
If a dividend was not declared, then the loan account will be overdrawn at the year end.
You can prevent a s419 issue by declaring a dividend post year end to cover it however. You will need to complete a long CT return showing the loan account as overdrawn at the year end, but it will then have been cleared within 9 months, so no s419 due.
Note re CT Return
Certainly before mandatory online filing, you no longer had to complete a "long" Return - the "short" version had been modified to deal with s419 tax (now s455).
Not sure how that sits now......