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Dodgy dealings; Farmland sale; Residential reliefs; Share reclassification
Dodgy dealings
A primary shareholder continues to work for his company after bankruptcy.
Our client was made bankrupt in May 2013 at which point he owed about £300 000 to the company in which he owns 99% of the share capital.
These funds had been advanced to him over several years and tax had been paid by the company under CTA 2010 s 455.
In December 2015 the company wrote to the court saying that it had no claim in the bankruptcy in respect of the loan which had by then increased to £500 000. Our client received an annulment to his bankruptcy later in the same month. He had continued to work for the company during his period of bankruptcy but without receiving a salary.
I look forward to readers’ views of the tax consequences for the company and client.
Query 18 792 – Welsh...
