Did you know that when directors borrow from their own companies they incur a temporary tax charge?
The rate of tax charged on loans to participators & other arrangements is currently 25% and is being linked to the dividend upper rate which from April 6th 2016 will be 32.5%.
Section 455 CTA 2010 liabilities must be included in a company’s CT600 tax return. The S455 tax forms part of the calculation of tax payable by the company under Paragraph 8 Schedule 18 FA 1998
A claim to relief under Section 458 is a claim for relief against the original tax charge for the AP in which the loan was made. The time limit for the claim is four years from the end of the financial year in which the loan is repaid, released or written off. COM53120
You must use form L2P to enable a close company, which has paid tax on a loan to a participator to reclaim that tax once the loan has been repaid, released or written off.
For further help or information call 0141 345 2335 or visit our website: http://www.kppca.co.uk/