The loan to participant rules, more commonly known as directors' loans, impose a tax charge on the company where it makes a loan to a director or a shareholder.

The rules apply where a close company, a UK company that is controlled by five or fewer participators or by any number of participators who are directors, is making loans to an individual that is either a participator or associate in the close company.

However, there are three exceptions to these rules: a loan to a charitable trust, business of lending money and low-value loans to an employee/director.

By completing this module on directors' loan rules, you will be able to:

• determine whether your client’s circumstances give rise to a tax liability;
• calculate the tax charge, including taking into account repayments of the loan;
• claim relief for a repayment/release of the loan; and
• advise on the consequences of writing-off a loan for the company and for the participation

This CPD module takes 20 minutes to complete and is followed by a short quiz to ensure thorough learning. There are also detailed course notes to ensure a full learning experience. Any CPD learning is also automatically added to Your CPD Tracker.

The CPD course lecturer is Stephen Relf ACA CTA, lead tax writer at Croner-i.

Play the CPD module here

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