Loans to shareholders
You'll learn how loans provided to shareholders are taxed, including the key distinction between employee and non-employee borrowers, how interest rates affect tax treatment, and the significant penalty tax charge companies face.
This lesson is part of a paid course
Buy the course to unlock every video lesson and the AI Tutor, plus mock exams with feedback on CIMA courses.
Already bought? Sign in
Ask the AI tutor anything about this lesson
It knows every lesson in the course — explanations, clarifications, practice questions.
In this lesson
- 0:00 Shareholder loans tax treatment overview
- 0:16 Employee vs non-employee loan rules
- 0:41 Loan write-offs and dividend treatment
- 1:04 Company penalty tax charge explained
- 2:31 Loan repayment and tax relief rules
- 3:07 Exemptions for small loans and employees
About this lesson
This lesson covers the corporation tax implications when shareholders take loans instead of dividends or salary, the rules for loan write-offs, and the important exemptions that apply to smaller loans or employee-shareholders with minimal ownership stakes. Understanding these rules is essential for Advanced Taxation (ATX) as examiners frequently test the interaction between loan benefits, dividend taxation, and the anti-avoidance penalty charge that HMRC applies to discourage tax avoidance strategies.
Duration: 4m
Transcript
Every lesson comes with a full searchable transcript - included with the course.
Get the Advanced Taxation course
All 365 video lessons, an AI Tutor in every lesson and lifetime access.
Already bought? Sign in