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?
- Cash basis 447 12
- Retail vat schemes for a restaurant 129 1
- Rental Property W&T And Equipment 259 1
- Legislation access for part-time sole practitioner? 280 1
- Ownership of land - declaration of trust 147 3
- Fee base v staff ratio 301 6
- Ltd Company Buying Own Shares and Transferring Assets 149 2
- NIC thresholds - two employments 1,839 27
- Statutory Accounts - Dividends Disclosure Note 318 3
- Unincorporated organistion ceasing to exist 227 2
- Gift in kind to charity by company: services 83 1
- Investor exit 186 3
- Partially exempt? 364 10
- Debtor/creditor set-off 138 1
- Redundancy payment added to p45 402 3
- Undeclared rental income 2,261 22
- CIMA accountant wants to start consultancy 385 4
- Statutory sick pay 251 3
- Overseas bank interest 230 5
- Contractor accommodation expenses 173 1
- Skandia using wrong address 560
- FHL, period of grace and Entrepreneur's relief 303
- Does anyone use PS Financials accounting software out there? 301
- Employee rewards 283
- Gift of reversion and lease into trust by two different people - later PPR 237
- EPS Analysis - Change to EURO 221
- Etax Australian 181
- LLP in Construction Industry 146
- Selling On Amazon & Calculatign Prices/Vat 127
- Interest and late payment charges HMRC 125