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Directors loan

Arms length loan still in s455 tax?

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Hi 

If a client borrows money from his company on an arms-length basis - loan agreement, monthly direct debit repayment of principal plus interest etc, does the S455 still apply (loan will be for 2 - 3 years?)

Thanks

 

 

Replies (15)

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By chicken farmer
15th Nov 2018 19:01

I suggest you read s. 455. That should give you the answer.

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Replying to chicken farmer:
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By Tax Dragon
15th Nov 2018 20:05

I approve of the citation.

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Replying to Tax Dragon:
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By chicken farmer
15th Nov 2018 22:56

He is already aware of s455 I was just suggesting that he should actually have read it instead of asking the question!

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RLI
By lionofludesch
16th Nov 2018 09:31

I can remember when it was unlawful for companies to lend money to directors.

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By tonycourt
16th Nov 2018 10:15

Look at s.456 rather than s.455

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Replying to tonycourt:
By Ruddles
16th Nov 2018 10:21

But if he's read s455 properly then he should already have read s456 as well ;¬)

I agree though that s456 is the more directly relevant provision.

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Replying to Ruddles:
RLI
By lionofludesch
16th Nov 2018 10:36

The OP doesn't claim to have read s455, does he ?

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Replying to lionofludesch:
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By Accountant A
16th Nov 2018 10:43

lionofludesch wrote:

The OP doesn't claim to have read s455, does he ?

No but, fair play, he's heard of it and can bandy the reference about,

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Replying to Accountant A:
Portia profile image
By Portia Nina Levin
16th Nov 2018 10:46

Perhaps he needs to read things written down, rather than on screen, and hasn't yet found a suitable supplier of A4 paper. It's been quite a common thing of late.

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Replying to lionofludesch:
By Ruddles
16th Nov 2018 10:48

That is why I used "if" - as he may have since read it following the recommendation to do so. Although he may, as Portia suggests, be awaiting a stationery delivery.

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By SteLacca
16th Nov 2018 10:56

The question refers specifically to a director's loan. I don't see the relevance of S455 for that.

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Replying to SteLacca:
RLI
By lionofludesch
16th Nov 2018 11:03

But he also says that the client borrows it from "his company", implying significant share ownership.

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Replying to lionofludesch:
By SteLacca
16th Nov 2018 11:27

It could be, or it could just be a figure of speech, in the same way that I conduct my daily commute on "my train", even though I don't own a train.

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Replying to SteLacca:
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By Portia Nina Levin
16th Nov 2018 11:32

In this case though, if he didn't own the company, I'd have expected him to refer to it as his employer.

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Euan's picture
By Euan MacLennan
16th Nov 2018 18:28

When you retire and no longer have to go to work every weekday, you lose track of the days
... but this thread tells me that it must be Friday!

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