I have a profitable client with a overdrawn directors loan account. Nine months after the year-end the overdrawn balance is similar to the year end balance, however, since the year-end dividends have been credited to the loan account in excess of the year-end balance. Therefore I need to know directors loan accounts operated on a FIFO or LIFO basis to establish if section 419 tax is payable.
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If you check out Re Clayton's case (1873) you will find that you can choose which debt or debts are settled by which payments. HMRC manuals carry a reference to this, if you care to look for it.
You do also need to look at the rules on "churning" as well.