Chris Holmes (BDO) and David Hicks (Charles Russell Speechlys) consider the tax consequences of releasing wholly or partly recoverable inter-company debts.
The release of a debt between companies with common shareholders is usually a distribution to the shareholder unless the loan is to a subsidiary. That is an oft-overlooked fact when advising on a release of debt by a corporate to another corporate.
Most clients and advisers seem to be happy that if a loan to a shareholder is released that would constitute a distribution but for some reason many do not recognise that the same is usually true for loans to a related company with common shareholders and many will push back when the matter is raised.
Historically this is not usually an issue either because (a) the companies are within the same group (so the distribution to the corporate parent is exempt to...
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Chris Holmes (BDO) and David Hicks (Charles Russell Speechlys) consider the tax consequences of releasing wholly or partly recoverable inter-company debts.
The release of a debt between companies with common shareholders is usually a distribution to the shareholder unless the loan is to a subsidiary. That is an oft-overlooked fact when advising on a release of debt by a corporate to another corporate.
Most clients and advisers seem to be happy that if a loan to a shareholder is released that would constitute a distribution but for some reason many do not recognise that the same is usually true for loans to a related company with common shareholders and many will push back when the matter is raised.
Historically this is not usually an issue either because (a) the companies are within the same group (so the distribution to the corporate parent is exempt to...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
