S458 relief on former participator loan

When is relief due?

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Participator has an outstanding loan on which S455 tax has been paid.

Particpator leaves the company.

Although the accounting treatment of the loan may change, am I correct in saying that there is no s458 repayment claim just because this is no longer a 'participator loan'?

i.e. S458 relief can still only be claimed when the loan is repaid or written off.

Surely that is correct?  Makes sense, but you don't know what you don't know!

Cheers,

JC

Replies (12)

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By David Ex
08th Feb 2024 17:18

Seems logical as the loan was made because the individual was a participator. Not a technical analysis, I’m afraid!

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Replying to David Ex:
By JCresswellTax
08th Feb 2024 17:21

Thanks, logic is all I have myself for this one! I can't see any specific reclaim provisions for this scenario, so therefore presume that means it isn't possible.

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By Ruddles
08th Feb 2024 17:21

You are correct. There was a recent (last month or so) discussion on the same topic.

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Replying to Ruddles:
By JCresswellTax
08th Feb 2024 17:22

Perfect thanks.

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By MattC4685
12th Feb 2024 09:37

https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm61602 covers what constitutes repayment and book entries not being sufficient

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By Justin Bryant
12th Feb 2024 13:44

When the boot is on the other foot, HMRC will happily make a "present tense" legislative argument. See: https://www.accountingweb.co.uk/any-answers/ebt-iht-liability-as-sponsor...

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Replying to Justin Bryant:
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By Tax Dragon
13th Feb 2024 05:58

You love bringing in irrelevant, illogical comparisons. The other foot here would be if the loan was to someone who was not a participator at the time but who became one before the debt was cleared.

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Replying to Tax Dragon:
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By Justin Bryant
13th Feb 2024 08:54

As usual, you've missed the point.

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Replying to Justin Bryant:
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By Tax Dragon
13th Feb 2024 09:09

No. You have.

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Replying to Tax Dragon:
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By Justin Bryant
13th Feb 2024 10:14

Yes; you're right. I've missed my own point. What a complete fool I must be! (Not.)

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Replying to Justin Bryant:
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By Tax Dragon
13th Feb 2024 10:24

You're right Justin. Only you are able to make points.

And you're also right that 'the other foot' doesn't refer to right foot as against left foot, or anything like that. Thank you for the revelation that it refers to other kinds of feet. Or maybe not feet at all - maybe fins or flippers.

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