Lee Sharpe continues his review of what makes distributions unlawful and HMRC’s approach to them.
In the first article, I looked at:
- What is a lawful distribution, so as to determine whether a distribution has been made unlawfully (or ‘illegally’).
- The company law treatment of amounts paid to shareholders who knew, or reasonably should have known, that they exceeded the lawful maximum.
- HMRC says that repayable amounts should be treated as loans to participators (where the company is ‘close’ within CTA 2010, Pt 10 (s 438 et seq.)).
- Under corporation tax self-assessment, it largely falls on the directors to ‘tell’ HMRC through the tax return when an illegal dividend has been made and to pay any additional section 455 tax due, etc.;
