Hi,
We're a 2 director company, currently in the process of winding down as we would like to dissolve & carry on as a partnership for simpler accounting.
When we set up the business we funded it via Director's Loans. These accounts have not yet been repaid by the company. We have approx £3k in the business bank account & £3k in stock. We will carry the stock forward into the partnership.
As we are winding down & splitting the assets, I'm wondering if we can:
- split the remaining bank funds & distribute back to us both, tax-free, as part repayments on the Director's Loan Accounts?
- distribute the remaining stock back to us as part repayments on the Director's Loan Accounts so as to reduce the Creditors figure on the final balance sheet?
Thanks in advance.
Replies (11)
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If you were aware of that then why did you ask if repayment of the loan was taxable?
In any event, it doesn't matter whether the company pays you in cash or in assets. The assets have to be transferred at market value.
If you have all this cash and stock, you can easily afford to pay your accountant to advise.
It may be the way I am reading the question, but it sounds as if the company has more debt than it can afford and that you are prioritising repayment of your own loans.