DIRECTORS LOAN ACCOUNTS AND COMPANY DISSOLUTION

DIRECTORS LOAN ACCOUNTS AND COMPANY DISSOLUTION

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Have a client who has several companies, one of which they no longer trade through and want to strike off. However they have overdrawn directors loan accounts and not the cash to repay. What is the process to resolve this and complete the dissolution/strike off of the company.

Any help/advice appreciated thank you.

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By courty61
24th Feb 2011 14:45

DLA

isnt the loan written off in the accounts and just treated as a distribution out of income on the director? I.e. taxed on him as a net dividend

ITIOA 2005 s.415

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By billgilcom
24th Feb 2011 16:42

Write off loan

Basically you will have to write the loan off before gettign into the strike off procedures otherwise if the company is struck off it will have assets (namely overdrawn Loan Accounts) that will fall to the Crown and be recoverable by the Lord Chamberlains Department of the Treasury

regards and hope that this helps

[email protected]

www.wamstaxltd.com

 

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Nichola Ross Martin
By Nichola Ross Martin
24th Feb 2011 19:33

Treat loan write off as earnings for NICs?

see the desision in Stewart Fraser - but you never know, these things are facts sensitive and that was only the First Tier Tribunal.

The other point is to consider the timing of any s455 tax refund due, depending on whether paid in the first place, and the requirement to file P11Ds etc to account for beneficial loan interest. A lot of housekeeping to complete first.

Virtual tax support for accountants: www.rossmartin.co.uk

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