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?
- Vat on Royalites 75 1
- 100% Xero practice 2,106 34
- Vat treatment of charity business income 56 3
- Any Scottish members out there? 9,152 341
- where has the honest passion to help gone..??? 830 17
- Umbrella Company 131 2
- Outsourcing iXBRL Tagging 421 24
- Payroll YTD info on Operaii 74 1
- Treatment of goodwill in Consolidation 138 5
- Mortgage deposit Gift 422 18
- Profitable company wanting to buy an office 158 3
- property rental income split 254 3
- Shadow director or alternative? 466 4
- Does my client qualify for CGT Loss? 123 1
- EIS/SEIS capital gains exemption 93 2
- About to buy a block of fees. Any advice? 1,266 5
- Use of home for storage 325 6
- VAT registration for self employed dentist??? 324 10
- Shutting down a company with creditors 1,238 21
- Shutting down losing Directors Loan 350 4
- Raiders of the Lost Tax File 1,185
- Chartered Accountant in County Down N.Ireland 403
- IPP (International Pension Plan) income 313
- National Insurance 307
- valuation of intangible asset FRS10 and FRS20 260
- Cass 5 FCA Client Money Software recomendation 233
- Unnecessary S9A Enquiries 232
- Non Resident 218
- Franchise income and costs 201
- A question for the payroll-only bureau's out there 147