Member Since: 12th Jun 2014
27th May 2020
I think the point is that diabetics are at risk of developing ketoacidosis (which is very serious if untreated) with this virus as well as the general risk of an inflammatory response in the lungs which other folk, asthmatic or not, are also in danger of getting.
26th May 2020
Just a query if you don't mind. Have you considered whether s1035(3) CTA 2010 may apply to increase the length of ownership or did the parents literally acquire their shares from scratch 4 and 3 years ago?
22nd May 2020
If she purchased the shares in the company what choice did she have - it is the company that is registered for VAT, not the shareholders!
12th May 2020
Tax Dragon wrote:
It's a company.
Yes, and the Croner-i extract was from the commentary on "Companies carrying on mutual business" so I don't quite see the relevance of your comment although you are, of course, correct - it is indeed a company!
12th May 2020
No, the s455 tax is of no relevance to the taxation of the write off but I thought I'd better mention it for completeness.
I agree it is a distribution for income tax purposes.
The tax legislation is at s19 ITA 2007 so that when all or part of the loan is written off or released it becomes part of the participator’s income. The amount written-off or released is treated as dividend income.
If the participator is an employee or director, this charge takes precedence over the charge on earnings which applies in similar circumstances by virtue of s189 ITEPA 2003 which only applies if the amount is not otherwise taxable.
There is no parallel in the NIC legislation though which is why an NIC charge arises.
11th May 2020
There are 4 things in play here.
First, a close company (presumably) has made a loan to a participator so s455 tax should have been deducted and paid over in respect of the accounting period(s) in which the loan arose subject to the 9 month rule. Any s455 tax paid is now repayable.
Second, the loan has been forgiven (hence why the s455 tax is repayable). This would give rise to earnings and NIC except that, for tax, distribution treatment takes precedence so there is a distribution subject to tax.
Third, as mentioned above the distribution treatment does not apply for NIC purposes so there is also an NIC charge.
Finally, the participator has disposed of the shares and is therefore subject to CGT on any gain. The gain may fall within the business asset disposal relief (aka entrepreneurs' relief) rules.
7th May 2020
It certainly sounds like a mutual business. Per Croner-i: A mutual business is one where the persons entitled to any surplus arising from the business are the same as the persons who contributed to that surplus. In effect the members contribute to a fund which is extended for their benefit, and any surplus after deducting expenses is returned to the contributors. Such a surplus does not represent a profit and is not taxable. The surplus is not taxable only if everyone who contributes to the fund is entitled to participate in the surplus and everyone who participates in the surplus has contributed to the fund.
7th May 2020
"Might just go and listen to "Five Years" as it seems rather apt just now."
Could just find that too depressing :(
7th May 2020
But he won't get Covid-19. Per some cat (but not from Japan) smoking kills the virus https://www.accountingweb.co.uk/any-answers/returning-to-work-will-you-b... and:
"Time takes a cigarette, puts it in your mouth
You pull on your finger, then another finger, then cigarette
The wall-to-wall is calling, it lingers, then you forget
Oh, you're a rock 'n' roll suicide"
5th May 2020
Agreed, just don't want folk being mislead that any old anti-bac will save them from Covid-19, or any other virus for that matter.