Company A loaned director £160,000 to purchase a property, S455 tax was paid on this loan.
Director has now transferred ownership of the property to Company B (which is a holding company)
My question is can the credit balance on the Director's current account in Company B transferred to Company A to write off the overdrawn DLA?
Replies (8)
Please login or register to join the discussion.
When Director sold /disposed property to Company B what did he agree re price?
Does company B owe director the purchases price, or a partial balance re same?
Go back to the legal agreement re sale/disposal to Company B and see what was agreed re the deal.
In addition, re his personal CGT liability (if any), what was market value of the property when he sold to Company B presuming he is connected to Company B?
What did he/ Company B do about Stamp Duty Land Tax re sale/disposal to Company B?
In essence until the deal is examined you cannot really say what if any liability company B has to the director, all you know is that he owes Company A £160,000 and there is a potential/actual debtor within Company A re s455 tax of likely £40,000 or more.
Edited as got numbers wrong:
Re your accounts entries:
So Director owes £160k to Company A and is owed £163k by company B.
So if Company A lends £163k to Company B it can then use this loan to repay £163k to director and he can then use these funds to repay £160k to Company A.
Company B then owes £163k to Company A.
Well I always prefer a bank trail, so you could always say take £10k and circulate it 16 times!!!!!
Other than that you are into selling the debt.
Director transfers £160k of the debt owed by Company B to him to Company A in satisfaction of his overdrawn loan account with Company A.
I much prefer structures where physical cash moves and there is evidence within the bank statements of the respective parties; avoids evidence issues later.
Company A can borrow the money from the director. Sounds like Ouroboros Holdings Limited.