Directors' Transactions - Key Tax Considerations

Objectives

The webinar will consider all aspects of transactions between directors and the companies they control. The technical tax issues will be explored, and practical advice on dealing with the formalities will be included. Suitable client facing advice will also be covered.

Key topics

Tax due on overdrawn loan accounts

• Tax arising under s 455 CTA 2010
• Anti-avoidance s 464C CTA 2010
• Anti-avoidance – Finance Act 2025
• Tax arising under s 175 ITEPA 2003

Clearing the loan account with salary or dividend

• Clearing the loan with a dividend payment
• Clearing the loan with a salary award
• Writing off the loan

Tax burden on salary / dividend

• Directors’ salary rates
• Dividend taxation
• Target income (gross) £100,000 – marginal small profits rate
• Scottish income tax rates
• Second director – with other income

Other points

• Directors’ bonuses – minute / resolution
• PAYE Regulations – risk of personal liability
• NIC legislation – risk of personal liability

Upper Tribunal appeal: Revenue & Customs Commissioners v O’Rourke [2013] UKUT 0499

Appeal case: Michael Denmark TC0696

Appeal case: Vinod Parmar & Bhwana Parmar v HMRC TC04927

Personal liability for directors in FA 2020

• Introduction
• Tax avoidance and evasion cases
• Repeated insolvency and non-payment
• Penalties for facilitating avoidance or evasion

Who should attend

General practice and tax professional staff who deal with owner managed companies and directors’ personal tax affairs.