Benefits to shareholders and illustration

In this lesson

1. 0:00 Close company tax implications overview
2. 0:30 Identifying close companies in exam questions
3. 1:03 Tax treatment for non-employee shareholders
4. 2:09 Tax treatment for employee shareholders
5. 2:25 Nocturne Limited worked example
6. 3:35 Company deduction rules for close companies

About this lesson

You'll discover why the same benefit can be treated completely differently depending on whether the shareholder is also an employee, and how this affects both the shareholder's personal tax and the company's corporation tax position. Through a worked illustration, you'll see exactly how to apply these rules in an exam scenario, including the critical point that benefits to non-employee shareholders are treated as dividends rather than employment benefits—which has significant consequences for tax deductibility and National Insurance. This topic is essential for TX and ATX papers, where close company questions are common but often missed by students who don't spot the telltale signs.

Duration: 4m