Entrepreneurs' relief

[polomf]

We used to, reluctantly, and for a £200 premium (ie £1,195+VAT+disbursements). However, there was an article in Taxation magazine circa 18 months ago that HMRC were starting to challenge these. Argument being that the client withdrawal of the funds pre liquidation was actually a dividend (not a loan), and hence the paper only distribution by the liquidator therefore be ignored. I don't know whether they were successful in this, indeed given speed cases go at it may still be rumbling on. However, we decided given that potentially negated the primary benefit of an offering like ours, and selfishly director loan cases were a PITA for us anyway, we decided to stop assisting with them.

What's the view on pre strike off of company, converting some recent dividend to directors loans (via freeagent) which are then paid off (from personal savings) before striking off the company. This is with the plan on making use of the full 25K ER without need for MVL?

[Maslins]

@Martin/Contratax - you're right that bold bit does sound clear. Got a feeling I'd loosely seen that before but didn't read in detail, and thought it was just clarifying that it would be deemed clearing the loan for S.455 purposes. Seems to clearly state it would be fine to be considered a capital distribution for personal tax purposes too. Being honest am still reluctant for us to do these though, whilst some went smoothly, definitely had a higher incidence of "problems" arising in those cases!

@polomf - main concern from your comments is "converting some recent dividends to directors loans". It shouldn't be a choice you make after the event. If at the time you withdrew the funds you considered it to be a dividend, then really that should stand. In practice it's something that's hard to prove one way or the other. If you deemed any explanation on FreeAgent of it as dividend to be a mistake, the intention was always a loan, which you then repay, I'd be surprised if you got into any issues from it.