Surplus cash on company balance sheet.

Surplus cash on company balance sheet.

Didn't find your answer?

Further to recent postings on the above.
I have a client company that owns and operates a holiday park. The company has a very large cash balance a large part of which has resulted from the shareholder selling some personal assets unrelated to the company business in recent years.
The cash is held in the company for convenience only and is balanced by a credit in the director's loan account of a similar amount.
Should I be advising the client to remove the cash from the company? It's circa £700k and the company's net assets are circa £550k.
Peter Hearne

Replies (1)

Please login or register to join the discussion.

avatar
By User deleted
22nd Nov 2006 10:00

Yes, get the cash out.
The large cash balance in the company is in danger of effecting the status of the shares when the owner comes to sell.

You want the shares to qualify as a business asset for business asset taper and also for IHT.

As the company owes the shareholder so much money it should be straight forwards.

Thanks (0)