Illustration - loan to shareholders
In this illustration, you'll learn how to handle loans made by close companies to shareholders—a common exam scenario that combines corporation tax, National Insurance, and dividend taxation.
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In this lesson
- 0:00 Loans to shareholders overview
- 1:02 Company tax charge on outstanding loan
- 2:36 Year end 31 July 2025 refund calculation
- 3:45 Loan waived National Insurance and dividend tax
- 5:06 Shareholder dividend tax on waived amount
About this lesson
The video walks through a detailed timeline showing how to calculate the tax charge when a loan is issued, track refunds when portions are repaid, and determine the tax consequences when the remaining balance is waived. You'll see exactly when tax is due (tied to corporation tax due dates, not the company year end), how to apply the 33.75% penalty tax rate, and why a waived loan triggers both employer National Insurance and dividend tax for the shareholder. This is essential knowledge for understanding the tax-efficient structuring of shareholder loans and how to avoid unexpected liabilities in your exam answers.
Duration: 6m
Transcript
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