Connected party loans
I act for a number of companies under common control, that, over the years, have built up loans that will probably never actually be paid.
None of the companies are insolvent, but a certain amount of 'tidying up' is required.
There are no 'bad debts' as such, and, while the debt is probably a mixture of trade and non-trade, hopefully a formal release of the debt will ensure a tax-neutral position.
In fact, my question is an accounting one, not tax.
It doesn't seem correct to account for this through the profit and loss account, as that will distort the true trading position. There is, after all, no trading reason for doing this.
Perhaps we could adjust the retained profits figure by way of note? in which case is any tagging required?
- Tax Allowance on University Course 19 1
- Gift to employee 336 9
- Transfer of a business 92 1
- You think HMRC are inefficient? 418 7
- I hate HMRC's voice recognition system - The Inept Interrogator 1,096 22
- Company Pension Contributions 2013/14 60 3
- Investment property where tenant lives rent free 393 8
- VAT Cross Border Invoicing 95 2
- Sage Import Data 282 6
- Slight twist on employment related securities 234 1
- Child and Working Tax Credits and sudden increase in investment income - does this trigger a claw back? 72 2
- Best time software for small practice? 194 2
- Residents Association Corp Tax 308 13
- private to company car? 353 9
- Which address 993 11
- Profit accruing in fiduciary or representative capacity 95 1
- Do I charge VAT for event I held in Paris 256 5
- PAYE Refund Farce At HMRC 954 15
- Car maintenance costs deductible against CT 254 6
- Does anybody still use a Filofax? 467 17
- DTR : TIOPA 2010 Section 42 471
- CTA study material 450
- Sect 102 TMA 1970 324
- Pre incorp expenses 301
- Relief on French Tax Deposit? 260
- Anyone have clients that use Pay4Later to offer customers credit? 248
- What is the tax position if I am working overseas but via a UK agency? 202
- Gift Aid after 5 April, before 31 Jan - Tax Credits 149
- Anybody have that old ACCA Student Training Record (STR1) 133
- Taxation of partners in an LLP following new rules 128