Tax Implicatins on a Directors Loan

Tax Implicatins on a Directors Loan

Didn't find your answer?

Hi,

What would the tax treatment be on a loan to a UK resident director of a non uk company.

The company makes the director a loan above £10,000.

I assume that the loan would be treated as bik and tax would be due on the interest rate differential and submitted on his p11d.

Loan was made in 2015-2016 tax year.

There is the possibility that the director may be posted overseas for a number of years.

What would the UK tax treatment be, if any, on the director if he pays back the loan whilst he is a non resident of the UK and would he still be taxed on the loan as a Bik ?

Thanks

Replies (1)

Please login or register to join the discussion.

avatar
By Montrose
24th Feb 2016 14:05

What is the problem?

The loan whilst it is outstanding is an "employment -related loan. When it is repaid it ceases to be one, so the BiK charge drops away.

There may be a confusion with the CTA 2010 s.455, which addresses loans to participators in close companies. But a non resident company is not a close company.

The only possible issue would be if the non-UK company were managed and controlled in the UK.

Thanks (0)