Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Tue, 25 Oct 2022 16:50:37 GMT by wilson1505
A company director borrow money from a limited company (director loan) in Jan 2021, Company hold a board meeting in Dec 2021 and decided to write off the director loan. Therefore the director loan was written off in Dec 2021. And then the director need to pay Income Tax on the loan through a Self Assessment tax return. In this case, is it the loan need to be reported on 2020/21 tax year tax return or 2021/22 tax return? https://www.gov.uk/directors-loans/you-owe-your-company-money Many thanks!
Posted Fri, 28 Oct 2022 11:18:12 GMT by HMRC Admin 20
Hi wilson1505,

Director's loans written off, are treated as dividend income in the tax year the loan is written off and the amount that would otherwise be chargeable at higher rate is therefore the dividend upper rate.  
UK Dividends are entered in box 4 of SA100, page TR3.
 SAIM5200 - Dividends and other company distributions: loans and advances by close companies to participators: amounts written off

Thank you.

You must be signed in to post in this forum.