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Taxation magazine queries ― loans to participators

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Taxation magazine queries ― loans to participators

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
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Overview

The following guidance note provides details of queries raised on loans to participators in the last few years in the Readers’ Forum section in Taxation magazine with a link to the full replies. It should be noted that the response to the queries is at a point in time and all relevant legislation should be confirmed as being currently applicable.

Joint directors’ loan account for divorcing couple

Details of the query as copied from Taxation magazine

I have recently been appointed to represent the wife in a divorce case. She and her husband were 50-50 shareholders in a successful family company. For the many years they operated, they funded most of their private expenditure through the company. The company's accountant/tax adviser did a good job of identifying private expenditure and charging it to a loan account which was cleared each year via dividends. However, he treated the loan account as a joint account and didn't differentiate between private expenditure attributable to the husband and the wife. Everything was lumped together. As part of the divorce,

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