Apologies for late last minute questions being fired but am asking for help before I go looking (yes cheeky I know)
Client has 31 March year end and at that date directors loan was £20k overdrawn, so £5k of s455 tax is due on 1st January 2013 unless the loan is/was cleared within 9 months of the year end.
Now, if they vote a dividend today for £20k (yes there are sufficient reserves now) and state in the dividend documentation that the net dividend be used to clear the loan account bfwd at 1st April 2012 of £20k will that suffice to negate the s455 liability?. I would point out that since 1st April the director has drawn further sums and at today the loan account is approximately £35k overdrawn.
I seem to recall an earlier thread/post that stated that dividends post year end - or money put into the company for that matter - can be offset against whichever balance the shareholder/director chose.
I will keep searching for the answer but ahead of me finding it any help would certainly enable me to retain what hair I have left !!!
Replies (3)
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Entirely correct
You are entirely correct in your reading.
It will not negate the loan benefit charge though.
Enjoy the beer.