Summary of TaxAngles - February 2022 Edition

Director's Loan and Anti-Avoidance Rules

Transactions between a director and their personal or family company can have tax consequences, particularly if a director owes money to the company. One such consequence is the Section 455 tax charge of 32.5% on the overdrawn balance if the loan remains outstanding after a certain period. Care must be taken to avoid falling foul of anti-avoidance rules, such as the 30-day rule and the intentions and arrangements rule.

Capital Gains Tax Annual Exempt Amount

The annual exempt amount for capital gains tax purposes allows individuals to realize gains up to a certain threshold tax-free. It is important to utilize this allowance before the end of the tax year to avoid losing it. Tax planning opportunities include reviewing disposals and considering the timing of realizing gains to make the most of the annual exempt amount.

Dividend Payments and Tax Planning

For businesses operating through personal or family companies, paying dividends before the end of the tax year can be beneficial, especially if shareholders have unused dividend allowances or to beat the dividend tax rate increases coming into effect. Careful consideration of dividend payments and timing can help optimize tax efficiency.

TaxAngles- Feb 2022 Edition - Flipbook by Fleepit