B&B - Exclusions

Hi, I have a question regarding CTA 2010 s464C about rules against bed and breakfasting. In CTA 2020 s464C (6) – “This section does not apply in relation to a repayment which gives rise to a charge to income tax on the participator or associate by reference to whom the loan, advance or benefit was a chargeable payment.” – we can see that in some situations S464C doesn’t apply. In case, in which a participator who is also the director in a close company, has an overdrawn director’s loan and want to repay it by means of a salary credited to the loan account, which would be subject to PAYE/NIC, would S464C (6) be in force, thereby rules against bed and breakfasting described in CTA 2010 s 464C (1), (3) would not apply? If yes, would that salary, credited to the loan account, have to be in the amount exceeding NI thresholds, or could it be lower?

Hi mgr.kamil,
We're unable to provide tax planning advice.
Please see the below guidance:
CTM61500 - Close companies: loans to participators and arrangements conferring benefit on participator: contents
If you require further advice on this matter, please seek professional help through a financial advisor or accountant.
Thank you.