s419 and outstanding share capital

s419 and outstanding share capital

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Would someone know if there is a s419 tax charge on the unpaid share capital in a close company, if it is outstanding for more than 9 months for YE. I am told the HMRC view is yes, but I am not convinced!

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X Abraham

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By User deleted
30th Jun 2008 12:07

I think you have a 419 problem.
you say
"The issued share capital was £25,000 of which only £15,000 was paid by the shareholder leaving £10,000 due by the company. "

Presumably you mean "to" not "by" the company?

If the accounts show
CREDIT
Paid up share capital£25,000,
DEBIT
Cash at bank £15000 ,
Due by shareholder £10,000


then that is a debt due by a participator to a close company and 419 applies.

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By User deleted
26th Jun 2008 17:15

What do you mean by 'unpaid'
Uncalled capital is not a debt due by the shareholder so cannot be a loan. Shares issued as paid up, where the subscription moneys are represented by a loan account[arguably unlawful anyhow] will indeed give rise to a s419 liability, and a benefit where the company is a close investment holding company[ICTA s13A]

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