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directors loans

1 director/shareholder

1 shareholder

Each hold £50 ordinary shares. They hadnt paid for them during the accounting period.

Rather than show unpaid share capital I have

dr dir loan

cr share capital

Im happy with all the RP disclosure etc

However:  its only £50 each. It will be repaid before the tax is due.

I dont need to do anything else do I?

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22nd Mar 2012 17:51

Yes - you do

Strictly, you should have charged only £50 to the director's loan account and £50 to Other Debtors.

However, s.455 tax applies to loans to participators (shareholders), not just to directors.  You need to disclose both the advance of the loans to the two individuals and the repayment within 9 months on the supplementary form CT600A when you submit the company's CT return for the accounting period.

"However:  its only £50 each."  There is no de minimis for s.455 tax.  If the loan was only £1 and not repaid within 9 months, you would still need to add 25p to the CT due.

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