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Any Answers Answered: S455 tax not payable?


In the final Any Answers Answered of 2021, Giles Mooney and Tim Good answer questions on a director’s loan account and whether a hold over claim needs to be amended.

17th Dec 2021
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Before Giles and Tim leave you to take care of your tax returns, the TAXtv duo have picked a couple of questions from the pages of Any Answers to have a look at.  

To view the full questions and AccountingWEB reader answers click on the links below:

S455 tax not payable?

The first question comes from Kevin Mc14 who has a quick question on section 455.

The user is doing some due diligence for a client who is in talks to buy another business. The DLA is overdrawn but an agreement is in place to pay this back over 10 years. 

“Obviously, with the term being 10 years, the DLA will still be overdrawn when S455 would be due. Accountant for the seller (who works for a reputable firm, hence why I'm seeking a second opinion) has stated that S455 will not be due as the loan is for a prescribed term and interest is charged. 

“I think S455 would still be due on the outstanding amount at that date. Who is correct?”  

Does holdover claim need to be amended?

The next question comes from the brilliantly named Ian the Taxman. 

“A number of years ago, the proceeds of a qualifying disposal were rolled into the purchase of another qualifying asset, and hold over relief was claimed under s165 TCGA 1992.

“It now appears that in the last few months, part of the asset has ceased to meet the qualifying conditions.  

“Consideration was given at the time to any non-qualifying element and any restrictions required, but does the calculation of the hold over claim need to be revisited now due to the current lack of qualifying status of part of the asset?

For the latest episode of TAXtv visit PTP Interactive.​ TAXtv is a monthly tax update programme available as an annual subscription, (11 issues plus budget editions) to view online, download from the internet or watch on DVD.

Replies (1)

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By Paul Crowley
18th Dec 2021 13:54

Always appreciated
Always press you tube, better in full screen

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