Client is in receipt of interest -free loans, which are not repayable on demand, from another company controlled by the director.
According to FRS 102 the loan has to be discounted and entries made to reserves or through P&L.
As the 2 companies are 100% owned by the director should the loan be treated as a director's loan and the discount treated as a capital contribution?
Or are they to be treated as a group and entries put through the P & L?
If the entries go through the P & L are they liable to tax or are they exempt as the Transfer Pricing rules don't apply to small companies?