Write-off of director's loan account during winding up
Company ceased trading 31 March 2011. Accounts show overdrawn director's loan account at 31/3/11 of £10K.
It has been suggested to leave the loan account overdrawn and pay the tax under S419 via the CT600, then to waive the loan account during the course of winding up (comencing now), with the result that the S419 tax is repaid and the waiving of the £10K will be a capital distribution, covered by the annual exemption.
Will this work?
Cheers for any assistance.