Limited company loan subject to S419 ICTA 1988 rules?

Hello,

I wonder if tax per s419 ICTA 1988 rules, or any other similar rules, would be due on the following:

The limited company in question has an accounting year-end date is 31 August 2011.  On 1 February 2011, it lent £40000 or so to an individual not related to the company in anyway.  This person was merely a personal friend of the company's Director.  This individual intends to repay it in full by 31 August 2012, but there is a chance they may not.  There also exists the chance of the company never recovering a penny from the individual.  But that's not really the issue right now.  Is any tax due on the £40000 (similar to S419 rules, where the tax would eventually be repaid on repayment of the loan) or do no such or similar rules apply; meaning that, for the time being, the amount should merely be shown upon the Balance Sheet as either 'other debtors' or 'investments'?

Any advice would be much appreciated.

Thanks.

Comments
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No s455 ( ex s419) tax

BKD |
BKD's picture

The company might be

bernard michael |

Loan relationships

kenmoody |
kenmoody's picture