Overdrawn Directors Loan account.

Good Afternoon,

Would someone be kind enough to confirm the following...

A client has an overdrawn director's loan account and so the correct actions would be:

Notify a loan to a participant on the CT600, then claim the relief if the loan is repaid within 9 months 1 day.

If the loan is over £5000 and interest free, it must go on the inidividuals tax return...

My main question is, if the loan is under £5000 should it still go on the CT600?

Opinions are divided in the office!!


  • Fingersan
    Fingersan Registered Posts: 84 ? ? ?
    Hi Ella

    I believe that if a loan is under £5,000, it is still an overdrawn DLA and should have the necessary S455 tax claculated and disclosed on the CT600. I believe that the rule with the under £5,000 balance relates to the benefit in kind. If a loan is outstanding of less than £5,000 then the interest element on the loan that has not been charged, does not need to be reported on the P11D.

    I think that is how it works, but it would be best waiting for other opinions!

  • Ellabobbin
    Ellabobbin Registered Posts: 92 ? ? ?
    That is my take on the rules also! But I'm just checking before I voice my opinion louder than I already have!

    Thank you!
  • imeldabye
    imeldabye Registered Posts: 147 ? ? ?
    Just to confirm that this is correct, careful though to also include details of the DLA on the accounts for CH
  • stevo5678
    stevo5678 Registered Posts: 325
    That may be correct technically but I think there are many who don't do this with loans below £5k with the assumption that it is repaid within 9 months (possibly with a statement confirming this from the director).
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