From my reading of the new director's loan rules, these would only apply to new loans taken out on or after the 20th March?
That is to say for a February year end the old rules would apply?
How about a March year end when the loan was taken out prior to the 20th March?
Replies (11)
Please login or register to join the discussion.
I am sorry! I haven't a clue ...
... what new rules you are talking about. A link or a summary of the new rules might elicit in some comments.
Agreed
S. 455 (which charges the original tax on the original advance) was substituted with effect to loans and advances made on or after 20 March. For periods that span 20 March you do then have to consider when the advance was made, which may now require a more detailed analysis.
The new bed and breakfasting rules in S. 464C and 464D apply to repayment and return payments made on or after 20 March.
And the arrangements conferring a benefit provisions in S. 464A and 464B apply in relation to arrangements that the company became a party to on or after 20 March.
Not sure if I've missed any of the changes that have been made?
No...
... the "new" rules apply differently depending on what's going on:
new advance - only applies to individuals before 20 March, but can apply to trusts and partnerships afterwards if now caught.repayment subsequently withdrawn - new rules apply where the repayment is on or after 20 March. So new rules can apply to old loans. However, in your example where the loan is repaid by dividend, the rules don't apply because the amount repaid (for which s. 456 relief will be sought) is then liable to income tax.benefit obtained on or after 20 March taxable.
Time to be pedantic
I fail to see the relevance of the new legislation to directors loans
Don't worry - they don't work
The anti-avoidance rules and bed&breakfasting have been introduced to catch "the bigger picture", ie EBTs and other wheezes.
But the worry about you not getting relief from s455 by clearing by dividend post YE if monies are then redrawn doesn't apply.
The B&B rules only operate if clearing of the loan is not otherwise taxable as income.
As dividends = income then we can continue to clear DLA and no s455.
But.............expect new rules in FA2014 which may catch DLA.