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Loan account refund

01 April 2014
Issue: 4446 / Categories: Forum & Feedback , Companies

A company paid tax under CTA 2010, s 455 in respect of directors’ overdrawn loan accounts. The loans were repaid in full shortly before a liquidator was appointed in connection with a members’ voluntary liquidation

We have a client company that paid tax under CTA 2010 s 455 in respect of overdrawn loan accounts held by the directors/shareholders for the accounting period that ended on 31 January 2012.

The indebtedness continued throughout the next accounting period which ended on 31 January 2013 but it was cleared completely on 8 September 2013 before a liquidator was appointed on 19 September 2013 in connection with a members’ voluntary liquidation.

The Inspector of Taxes is saying that any repayment of the s 455 tax cannot be made until 1 November 2014 ie nine months and a day after 31 January 2014.

We believe that the repayment can be made on 20 June because the appointment of a liquidator brings to an end a corporation tax accounting period but are readers aware of any procedures that can be taken advantage of to recover the...

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