Company loan from UK to Portugal

Company loan from UK to Portugal

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Sole company director and shareholder of UK Ltd has loaned approx £75k to another company he has registered in Portugal. (Portugal Ltd).
The funds have been loaned to support various expenditure in the anticipation of securing significant contracts in Portugal.
I am having trouble establishing the tax implications which will arise at the financial period end of UK Ltd with the balance sheet showing a debit balance of £75k in respect of the loan to Portugal Ltd.
Had the funds been loaned to the director as an individual sec 419 tax liabilities would arise. However, can anybody clarify the tax position with the funds having been lent to an overseas corporate entitiy rather than to an associated individual.

Any help appreciated.

Thanks.

Steve W

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Euan's picture
By Euan MacLennan
05th Dec 2007 11:35

Loan to related party
There is no s.419 position because the loan has not been made to a participator in UK Ltd. This is simply a loan to an associated company which must be disclosed in the notes as a loan to a related party and as there is now an associated company, UK Ltd's CT thresholds are halved.

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