On 1 May 2022, a close company which prepares accounts to 31 March each year lends 30,000
Question:
On 1 May 2022, a close company which prepares accounts to 31 March each year lends £30,000 to Ravi, who is one of its directors. No interest is charged on this loan. Ravi owns 18% of the company's ordinary share capital. Explain the tax treatment of this loan if:
(a) Ravi repays the loan in full on 15 February 2024
(b) Ravi repays £10,000 of the loan on 15 February 2024 and the remaining £20,000 is written off by the company on the same day.
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The loan is made during the year to 31 March 2023 so tax of 10125 3375 of 30000 is payable by the ...View the full answer
Answered By
Shivam Goyal
I possess the degree of Chartered Accountant (Highest degree in accounting and finance field) from India. I have been working in the accounting and finance field for the last six years in different companies. I have been teaching to American and other country students via online platforms for the last two years in the accounting and finance field.
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