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Beneficial Loan <10000

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Beneficial Loan <10000

  • This topic has 2 replies, 2 voices, and was last updated 5 years ago by Tax Tutor.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • December 27, 2019 at 6:55 am #556415
    Anonymous
    Inactive
    • Topics: 4
    • Replies: 5
    • ☆

    Chris:
    – Is employed by Methley Ltd and owns 10% of its ordinary shares.
    – Is a higher rate taxpayer
    – Methley Ltd would provide Chris with an interest-free loan of £9,600 on 1 October 2016.
    – The loan would be written off in three years’ time.

    In the answer, the beneficial loan was treated as “9600 x 25%”. It was given, “When the loan is written off, this will be treated as a distribution as Chris is a shareholder in Methley Ltd, which is a close company.”

    My question is, where did 25% come from and shouldn’t income tax be found for the “9600 x 25%” figure?

    December 28, 2019 at 3:08 pm #556466
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    Not sure what material you are using as the close company legislation is relevant to ATX – NOT TX-UK – this is not in our syllabus

    December 28, 2019 at 3:09 pm #556467
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    Not sure what material you are using as the close company legislation is relevant to ATX – NOT TX-UK – this is not in our syllabus

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