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?
- General tax book with planning 159 2
- Limited Company - Personal Bank Account 3,210 69
- 2013/14 failure to submit end of year submission 287 11
- Gift of property & improvements 122 2
- Error in past Corporate tax return 345 5
- VAT Invoice 141 4
- Company overdue but wants to be struck off 807 32
- IHT and Swiss Property 130 1
- Sale of house with planning permission - tax free? 222 3
- Flat rate Vat Scheme & Vat on wholesale production of Cakes and other deserts 188 7
- Vat code for journal entries of director's expenses 154 2
- Claiming VAT and missing receipts 453 10
- HMRC overreaching its powers -again against a small surveying firm? 377 8
- Help with tax codes on Sage 260 1
- Letting relief on property transferred to a spouse 188 6
- VAT code for invoice from not VAT registered company 258 4
- Accounting for a finance lease 167 4
- SA302's anyone?? 540 16
- A change from the old Q v NQ debate 1,645 41
- Renting for military reasons 195 2
- Skandia using wrong address 1,620
- Nil Rate Band Trust - index linked debt by way of charge over property 901
- International interest certificate 511
- NOVA 368
- Have we escaped Gift with Reservation of Benfit & Pre-owned asset charges? - Gift after benefit 298
- Management expenses for investment company 264
- Bonus Bonds 261
- Entertainer withholding tax in Australia 173
- tax on apprenticeship income 173
- P11D benefit received by widow 150