Overdrawn Loan Account
My client transferred assest into his company from a partnership and the valuations were questioned by HMRC.
Monies were withdrawn from the company by the director against this transferred amount.
The valuation has now been accepted a high and subsequently reduced.
My question is what is the effective date of the DLA being classed as overdrawn, is it:
1. The valuation should be amended on day one and the overdrawn account occurs after the first withdrawal with subsequent wihdrawals etc etc.
2. The valuation should be amended in the accounts year when the agreement was reached with HMRC and the DLA becomes overdrawn in that year.
Assume for now that the cleared within nine months of the year end doesnt apply to the earlier period but could for the current period.