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Corporate Estate Planning: Director Loan Accounts and Tax Implications at Death

· 21 min

Executive Summary

Director loan accounts sit at the intersection of corporate, income, and inheritance tax regimes, yet their treatment on a director-shareholder's death remains poorly understood and frequently mishandled. A credit director loan account -- where the company owes the director -- constitutes a debt due to the estate valued at face value under IHTA 1984 s.166, reportable on form IHT416, and critically does not qualify for business property relief under s.105(1).123 An overdrawn director loan account -- where the director owes the company -- creates an estate liability subject to s.175A discharge restrictions introduced by Finance Act 2013.4 With HMRC targeting approximately 4,000 companies through director loan account compliance campaigns in 2025-26, and BPR reforms from April 2026 introducing a GBP 2.5 million combined allowance that makes accurate classification of qualifying and non-qualifying assets consequential, practitioners advising owner-managed business clients must command the full taxonomy of DLA-related tax issues on death.56

1. The Hidden Tax Exposure in Owner-Managed Businesses

The IHT treatment of private company shareholdings is well understood by most practitioners: unquoted shares in a qualifying trading company attract business property relief at 100% under IHTA 1984 s.105(1)(bb), subject to the two-year minimum ownership period under s.106.37 What is less widely appreciated is that a director's loan account balance -- often accumulated over years of salary underdrawing, personal expense advances, or dividend timing decisions -- does not share that favourable treatment. The credit DLA is a creditor relationship, not an equity interest, and falls outside every category of relevant business property enumerated in s.105(1).3

The practical consequence is a planning paradox. A director-shareholder may hold company shares worth GBP 800,000 that attract 100% BPR, resulting in nil IHT on the shareholding. Simultaneously, a credit DLA of GBP 200,000 accumulated from years of underdrawing is fully chargeable at 40%, generating an IHT liability of GBP 80,000 -- an exposure the client and, in many cases, their accountant have not anticipated.13

This planning gap is becoming more financially consequential. From 6 April 2026, APR and BPR reforms introduce a combined GBP 2.5 million allowance for 100% relief, with relief at 50% (an effective 20% IHT rate) on qualifying assets exceeding that threshold. Unused allowance is transferable between spouses and civil partners, up to a combined maximum of GBP 5 million, with index-linking from 6 April 2031.6 For director-shareholders whose trading company shares approach or exceed the GBP 2.5 million threshold, every pound incorrectly classified as qualifying BPR property when it is in fact a non-qualifying DLA balance results in an IHT shortfall. The margin for error has narrowed.

HMRC enforcement activity reinforces the urgency. In November 2025, HMRC contacted agents representing approximately 4,000 companies regarding director loan account compliance, with a particular focus on CTA 2010 s.455 charges where anticipated repayments entered on CT600A returns were not subsequently made.5 From April 2025, HMRC corrected the CT600A system to prevent future-dated repayment entries.5 Separately, HMRC has written to directors whose loans were written off between April 2019 and April 2023 where the resulting income was not declared on self-assessment returns.8 The HMRC Directors' Loan Accounts Toolkit identifies common errors including failure to correctly identify loans, non-application of s.455 charges, incorrect repayment date recording, and unreported write-offs.9

Under the residence-based IHT regime enacted from 6 April 2025 by the Finance Act 2025, the "long-term UK resident" test (UK tax resident for at least 10 of the previous 20 tax years) replaces domicile for IHT purposes.10 For director-shareholders with international connections -- including those with DLAs held with overseas group companies -- the residence-based regime may affect whether worldwide assets fall within the UK IHT charge. Practitioners conducting annual reviews for owner-managed business clients should now routinely assess DLA balances alongside residence status and BPR qualification.

2. Credit Director Loan Accounts: When the Company Owes the Director

2.1 Identification and Reporting

A credit DLA arises where the company owes money to the director, typically through accumulated salary underdrawings, personal funds introduced, or expenses paid by the director on behalf of the company. On the director's death, this balance constitutes a debt due to the estate. HMRC Inheritance Tax Manual IHTM19040 specifically identifies "money owing to the deceased from a director's loan account or current account with a company" as a category of debt reportable on form IHT416.2 The balance is disclosed in Box 73 of the IHT400 return.1

A separate IHT416 form must be completed for each debt due to the estate. For director loan accounts, the relevant fields are boxes 3 and 9. If recovery of the full balance is "impossible or not reasonably possible," a reduced figure may be included on IHT400 with supporting details provided at box 9. Written evidence of any interest charged on the loan must accompany the form.11

2.2 Valuation Under IHTA 1984 s.166

The credit DLA is valued under IHTA 1984 s.160 (open market value) read together with s.166, which provides that "it shall be assumed that the obligation will be duly discharged" unless recovery is "impossible or not reasonably practicable."1213 The practical effect is a presumption that the full face value is chargeable. HMRC guidance at SVM108080 confirms that debts payable on demand typically equal face value; however, where a company's financial position suggests reduced repayment capacity, the debt should be assessed on an open market basis -- "what would someone pay to stand in the creditor's shoes?"14

The burden of proof rests on those claiming a debt is worth less than face value. Company trading losses alone do not automatically reduce the DLA value, because the company may possess assets or borrowing capacity sufficient to discharge the obligation. Even where company shares have nil value, creditors rank ahead of shareholders in a liquidation, potentially preserving some or all of the debt's realisable value.14

2.3 The BPR Exclusion

The credit DLA does not fall within any category of relevant business property defined in IHTA 1984 s.105(1). The principal statutory categories include: (a) a business or interest in a business; (b) unquoted securities giving the transferor control; (bb) unquoted shares; (cc) quoted shares or securities giving control; and (d) land, buildings, machinery, or plant used for business purposes.3 A loan to a company is a creditor relationship, not an equity interest -- it is neither a share, a security in the statutory sense, nor a business or interest in a business.315

One narrow exception exists. Unquoted securities such as debentures and loan notes may qualify under s.105(1)(b), but only where they confer control of the company on the transferor. This scenario is uncommon in typical owner-managed business structures.15

The interaction between the DLA and the excepted assets rule under IHTA 1984 s.112 warrants attention. Surplus cash within the company may constitute an excepted asset unless it meets the "past use" or "future use" business requirement, and an excepted asset reduces the BPR available on the shareholding.16 Where a credit DLA is effectively funded by retained cash in the company, the repayment of that DLA would reduce the company's cash balance. However, the DLA itself, being owed to the director personally, is a separate estate asset valued independently of the company's shares.316

2.4 Worked Example: Credit DLA Exposure

Scenario: Director A holds 100% of the shares in Trading Co Ltd, an unquoted trading company. At death, the shares are valued at GBP 1,200,000 and the credit DLA stands at GBP 300,000. Director A's personal estate (excluding the company interests) is GBP 400,000. The nil-rate band (GBP 325,000) and residence nil-rate band (GBP 175,000) are both available.

Asset Value BPR Chargeable
Trading Co shares GBP 1,200,000 100% (s.105(1)(bb)) GBP 0
Credit DLA GBP 300,000 None GBP 300,000
Personal assets GBP 400,000 None GBP 400,000
Total chargeable GBP 700,000
Less NRB + RNRB (GBP 500,000)
Taxable at 40% GBP 200,000
IHT payable GBP 80,000

The GBP 80,000 liability arises entirely from the combination of the non-qualifying DLA and personal assets. Had the GBP 300,000 been held as additional share capital rather than a loan account, the entire amount would have attracted BPR (total qualifying shares of GBP 1,500,000, well within the GBP 2.5 million threshold), reducing the chargeable estate from GBP 700,000 to GBP 400,000. After applying the combined NRB and RNRB of GBP 500,000, the taxable estate would be nil -- eliminating the GBP 80,000 IHT liability entirely.37

3. Overdrawn Director Loan Accounts: When the Director Owes the Company

3.1 Estate Liability and the s.175A Discharge Requirement

An overdrawn DLA -- where the director owes money to the company -- constitutes a liability of the estate under IHTA 1984 s.5(3) and is reported on form IHT419.1718 However, its deductibility is not automatic. IHTA 1984 s.175A, inserted by Finance Act 2013 Schedule 36, restricts the deduction: a liability may only reduce the estate value to the extent it is "discharged on or after death, out of the estate or from excluded property."419

Where the liability is not discharged, it may still be deductible if there is a "real commercial reason" for non-discharge and the main purpose is not to secure a tax advantage. A real commercial reason exists under s.175A(3) where the creditor operates at arm's length or an arm's length creditor would not require repayment.419 For overdrawn DLAs in close companies, this test presents genuine practical difficulties: the company is unlikely to be at arm's length from the director's estate, particularly where the surviving family members control the company and choose not to pursue the debt.

3.2 The s.162B Restriction for BPR-Qualifying Assets

IHTA 1984 s.162B, also inserted by Finance Act 2013, provides a further restriction. Where a liability was incurred to acquire, maintain, or enhance property qualifying for BPR, the liability must first reduce the value of that qualifying property before BPR is applied.2021 Any remaining liability may then be set against other chargeable assets, subject to s.175A.

This provision is directly relevant where an overdrawn DLA was used by the director to fund personal acquisition of BPR-qualifying assets -- for example, AIM-listed shares or EIS investments. The overdrawn DLA liability reduces the qualifying asset value before BPR is applied, rather than reducing the non-qualifying estate. The effect is to prevent taxpayers from leveraging BPR assets with company borrowings while simultaneously claiming the loan as a deduction against chargeable estate value.2021

3.3 Corporation Tax: The s.455 Charge and Relief

CTA 2010 s.455 imposes a charge on close companies that make loans or advances to participators (including directors) where the loan remains outstanding nine months and one day after the end of the accounting period.2223 The current rate is 33.75% of the outstanding loan balance, aligned with the upper dividend rate under ITA 2007 s.8(2) from 6 April 2022.24 The rate increases to 35.75% for loans advanced on or after 6 April 2026, consequent on the two-percentage-point increase to the dividend upper rate announced in the Autumn Budget 2025.24 Despite being paid alongside corporation tax, the s.455 charge is technically not corporation tax -- a distinction that matters for estate administration purposes.

Relief is available under CTA 2010 s.458 where the loan is repaid, released, or written off. Relief must be claimed within four years from the end of the financial year in which the triggering event occurs.25 On the director's death, if the estate repays the overdrawn DLA, s.458 relief is available to the company for the s.455 tax previously paid. If the company instead writes off the loan after death, s.458 relief is also available on the written-off amount.26

However, the company cannot claim a corporation tax deduction for writing off the participator loan. CTA 2009 s.321A, applying to write-offs from 24 March 2010 onwards, specifically denies the loan relationship deduction for amounts released to participators.27

3.4 Income Tax on Post-Death Write-Off: The s.190 Exemption

ITEPA 2003 s.188 normally charges income tax as earnings where a beneficial loan to an employee or director is released or written off.28 Section 190 provides a critical exception: no charge arises where a loan is waived or written off on or after the death of the director or employee to whom the loan was made. No National Insurance liability accrues.2829 This exemption applies only where the original borrower has died; the death of a relative of the borrower does not prevent the charge on a surviving director or employee.29

The interaction with ITTOIA 2005 s.415 requires careful analysis. Section 415 charges income tax where a close company releases or writes off a loan that was subject to CTA 2010 s.455, treating the released amount as dividend income.30 Section 415 operates under a separate statutory regime from s.188 ITEPA. While s.190 ITEPA clearly disapplies the employment-related earnings charge on death, the question of whether s.415 ITTOIA creates an independent income tax charge on the estate when a participator's loan is released after death is a technical area where the two statutory regimes do not explicitly cross-reference.3026 Practitioners should approach this interaction with caution and document the analysis supporting any position taken.

3.5 Worked Example: Overdrawn DLA on Death

Scenario: Director B holds 100% of the shares in Services Ltd and has an overdrawn DLA of GBP 150,000. The company previously paid s.455 tax of GBP 50,625 (33.75% of GBP 150,000). Director B dies; the estate comprises personal assets of GBP 700,000 and the shares valued at GBP 500,000 (BPR-qualifying).

Element Treatment
Services Ltd shares GBP 500,000 -- BPR at 100% -- chargeable GBP 0
Overdrawn DLA liability (GBP 150,000) deductible subject to s.175A
Personal assets GBP 700,000
If estate discharges the DLA
Chargeable: GBP 700,000 less GBP 150,000 = GBP 550,000
Less NRB + RNRB (GBP 500,000)
Taxable: GBP 50,000 at 40% = GBP 20,000 IHT
Company reclaims s.455: GBP 50,625
If estate does not discharge the DLA
s.175A may deny the deduction
Chargeable: GBP 700,000 -- IHT on GBP 200,000 = GBP 80,000
Difference: GBP 60,000 additional IHT

The company may write off the overdrawn DLA after death without triggering an income tax charge on the estate (ITEPA 2003 s.190), and may reclaim the s.455 tax under s.458.2825 However, the company receives no corporation tax deduction for the write-off under CTA 2009 s.321A.27

4. Close Company Transfer of Value Provisions

4.1 Lifting the Corporate Veil: IHTA 1984 ss.94-97

IHTA 1984 ss.94-102 lift the corporate veil so that transfers of value by a close company are attributed to its participators.3132 Where a close company makes a transfer of value -- that is, a disposition reducing the value of its estate -- tax is charged as if each participator had individually made a transfer, apportioned by their rights and interests in the company.3133 These attributed transfers are immediately chargeable; they cannot be potentially exempt transfers.32 The annual exemption (GBP 3,000) and spouse exemption are available against attributed transfers, but the small gifts exemption and marriage exemption are not.33

A de minimis threshold applies under s.94(4): where the amount apportioned to a participator does not exceed 5% of the total value transferred, the tax is disregarded for cumulation purposes.33

4.2 Application to Director Loan Account Dispositions

The application of ss.94-97 depends on the direction of the DLA and the nature of the disposition.

Where a close company releases a credit balance owed to a shareholder (the company pays off what it owes the director), this reduces the company's cash but simultaneously eliminates a liability, leaving net asset value unchanged. No transfer of value arises under s.94 because the company's estate has not been diminished.31

Conversely, where a close company writes off an overdrawn DLA owed by a participator (releasing a debtor), it is releasing an asset -- the right to recover the debt. This reduces the company's estate value and may constitute a transfer of value attributable to all participators under s.94.3132 In a typical owner-managed business where the director-shareholder is the sole or majority participator, the entire deemed transfer is attributed to a single individual.

For multi-shareholder companies, this has material implications. If one director's overdrawn DLA is written off, the deemed transfer is apportioned across all participators, potentially creating an unexpected IHT charge for minority shareholders who had no involvement in the lending decision. Practitioners advising companies with multiple participators should document the commercial rationale for any DLA write-off and consider whether the 5% de minimis rule under s.94(4) applies to individual minority holdings.33

5. Planning Strategies: Restructuring Director Loan Accounts Before Death

5.1 Capitalising a Credit DLA into Shares

The most impactful strategy for eliminating IHT exposure on a credit DLA is converting the loan balance into additional share capital. By subscribing for new shares at market value in exchange for the release of the DLA, the director eliminates the non-qualifying creditor balance and creates additional equity that may qualify for BPR under s.105(1)(bb).343

The conversion should not trigger income tax or National Insurance at the point of exchange, provided the shares are issued at market value.34 However, the new shares must be held for at least two years to qualify for BPR under IHTA 1984 s.106, unless they constitute replacement property under s.107.7 This two-year requirement makes early action critical, particularly for directors in declining health or approaching retirement. The issue of shares is a reportable event under the employment-related securities regime, requiring ERS reporting to HMRC.34

Practitioners should consider the practical constraints: share capitalisation may dilute existing holdings (where other shareholders are involved), may require amendments to the articles of association, and should be supported by a formal board resolution and share valuation. Where the company has multiple classes of shares, the capitalisation should be structured to avoid unintended shifts in value between share classes.

5.2 Systematic DLA Repayment and Redeployment

Where the company owes the director (credit DLA), the company can repay the loan during the director's lifetime, converting the non-qualifying DLA into cash. The director may then deploy the cash into BPR-qualifying investments (such as AIM-listed shares, though noting that AIM shares attract only 50% BPR from April 2026 and are excluded from the GBP 2.5 million allowance), EIS investments, or other IHT-efficient structures.6

Where the director owes the company (overdrawn DLA), systematic repayment eliminates the s.455 charge and removes the estate liability and deduction complexity under s.175A. Repayment may be funded through dividends, salary, or bonus, each with its own income tax and National Insurance consequences. The income tax cost of extracting funds to repay the DLA should be modelled against the IHT benefit of eliminating the s.175A risk.

5.3 Dividend Strategy to Prevent DLA Accumulation

Declaring regular dividends rather than allowing credit DLA balances to accumulate avoids the problem at source. The income tax cost of dividend extraction (at 8.75%, 33.75%, or 39.35% depending on the director's marginal rate) may be lower than the eventual 40% IHT charge on the DLA balance. This calculation depends on the director's expected lifespan, the availability of nil-rate bands, and whether the cash received is deployed into IHT-efficient assets or consumed.

5.4 Life Insurance and Other Mitigation

Where restructuring is impractical -- for example, where the company lacks the cash flow to repay a credit DLA, or where the two-year BPR qualification period for newly issued shares creates unacceptable risk -- term assurance written in trust can provide a fund to meet the anticipated IHT liability on the DLA. The policy proceeds, held in a discretionary trust, fall outside the insured's estate and are available to the trustees to discharge the IHT liability.

5.5 Family Investment Company Considerations

Family investment companies may use director loan structures where the founder loans capital to the company, retaining a DLA that is an asset in the founder's estate while growth shares are held by the next generation.35 However, the founder's credit DLA remains a chargeable estate asset; the IHT benefit arises from value growth attributed to the gifted growth shares, not from the DLA itself. The FIC structure does not eliminate IHT on the DLA balance.35

5.6 BPR Reform and Planning Urgency

The April 2026 BPR reforms make DLA restructuring more urgent for larger estates. Where a director-shareholder's qualifying trading company shares exceed GBP 2.5 million, only 50% relief applies to the excess. If a GBP 300,000 credit DLA could be capitalised into shares, it would attract 50% BPR rather than zero relief -- reducing the IHT exposure on that GBP 300,000 from GBP 120,000 to GBP 60,000.6 The capitalisation must occur sufficiently early to satisfy the two-year ownership requirement under s.106 before the director's death.7

Conclusion

Director loan accounts represent one of the most consequential yet underexplored intersections of corporate and personal taxation in estate administration. The core planning risk -- that a credit DLA falls outside BPR while the underlying shares attract full relief -- creates IHT exposure that many director-shareholders and their advisors fail to anticipate until the estate is being administered.

Practitioners advising owner-managed business clients should integrate the following assessment into annual review processes:

  1. Identify DLA direction and quantum -- Confirm whether the balance is credit (company owes director) or overdrawn (director owes company), and quantify the balance at the review date
  2. Assess IHT exposure on credit DLAs -- Calculate the IHT liability arising from non-qualifying DLA balances, factoring in available nil-rate bands and the BPR position of the shares
  3. Evaluate s.175A compliance for overdrawn DLAs -- Where the estate holds an overdrawn DLA, determine whether the liability will be discharged and document the commercial basis for any non-discharge
  4. Review s.455 position -- Confirm that the company's s.455 compliance is current, that CT600A entries reflect actual repayment status, and that s.458 relief claims are filed within the four-year window
  5. Model restructuring options -- Assess the feasibility and tax cost of capitalisation into shares, systematic repayment, or dividend strategy, with particular urgency where the two-year BPR qualification period under s.106 is a constraint
  6. Coordinate cross-referral -- Engage corporate lawyers for share restructuring, insolvency practitioners where company solvency is in question, and financial planners for alternative IHT mitigation strategies

The April 2026 BPR reforms and HMRC's 2025-26 DLA compliance campaign provide both commercial urgency and regulatory impetus for this advisory work. Practitioners who develop specialist competency in DLA estate planning will identify material tax-saving opportunities for director-shareholder clients and their estates -- a service that is currently underserved in the market.

CPD Declaration

Estimated Reading Time: 18 minutes Technical Level: Advanced Practice Areas: Inheritance Tax, Corporation Tax, Owner-Managed Businesses, Estate Administration

Learning Objectives

Upon completing this article, practitioners will be able to:

  1. Distinguish between the IHT treatment of credit director loan accounts (company owes director) and overdrawn director loan accounts (director owes company) at death, identifying the applicable reporting forms and statutory provisions
  2. Apply the IHTA 1984 s.166 valuation principles and s.175A deduction restrictions to director loan account balances in estate administration
  3. Evaluate planning strategies to restructure director loan accounts before death, including loan capitalisation into shares and the BPR implications under s.105(1) and s.106
  4. Analyse the interaction of CTA 2010 s.455, ITEPA 2003 s.190, and ITTOIA 2005 s.415 when a close company writes off a director loan after the director's death

Competency Mapping

  • ICAEW Code of Ethics: Professional competence and due care in tax advisory services
  • ACCA Rulebook: Section 130 -- Professional competence and due care; maintaining current technical knowledge in taxation
  • ATT Professional Rules: Standards of professional conduct in advising on IHT and corporation tax

Reflective Questions

  1. How would you integrate director loan account analysis into the annual review process for owner-managed business clients, and what triggers would prompt a restructuring recommendation?
  2. What additional due diligence steps should be implemented when advising the estate of a deceased director-shareholder with material DLA balances, particularly regarding s.175A compliance?
  3. How might the April 2026 BPR reforms change the cost-benefit analysis of converting a credit DLA into shares for director-shareholders approaching retirement?

Professional Disclaimer

The information presented reflects the regulatory and legislative position as of 26 February 2026. Regulations, tax rules, and professional guidance are subject to change. Readers should independently verify all information before acting and seek advice from appropriately qualified solicitors, financial advisors, or other professionals for their specific circumstances.

Neither WUHLD nor the author accepts liability for any actions taken or decisions made based on the content of this article. Professional readers are reminded of their own regulatory obligations and duty of care to their clients.

Footnotes

Footnotes

  1. HMRC Inheritance Tax Manual IHTM10106: Debts due to the estate (box 73). https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm10106 ↩ ↩2 ↩3

  2. HMRC Inheritance Tax Manual IHTM19040: Types of debt reported on form IHT416. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm19040 ↩ ↩2

  3. Inheritance Tax Act 1984 Section 105: Relevant business property. https://www.legislation.gov.uk/ukpga/1984/51/section/105 ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7 ↩8 ↩9

  4. Inheritance Tax Act 1984 Section 175A: Discharge of liabilities after death. https://www.legislation.gov.uk/ukpga/1984/51/section/175A ↩ ↩2 ↩3

  5. ICAEW: HMRC contacts agents about directors' loan accounts (November 2025). https://www.icaew.com/insights/tax-news/2025/nov-2025/hmrc-contacts-agents-about-directors-loan-accounts ↩ ↩2 ↩3

  6. GOV.UK: Agricultural property relief and business property relief changes. https://www.gov.uk/government/publications/changes-to-agricultural-property-relief-and-business-property-relief/agricultural-property-relief-and-business-property-relief-changes ↩ ↩2 ↩3 ↩4

  7. Inheritance Tax Act 1984 Section 106: Minimum period of ownership. https://www.legislation.gov.uk/ukpga/1984/51/section/106 ↩ ↩2 ↩3 ↩4

  8. Azets: HMRC nudge letters targeting director loan accounts. https://www.azets.com/en-uk/insights/hmrc-nudge-letters-targeting-director-loan-accounts-action-may-be-required ↩

  9. GOV.UK: Directors' loan accounts toolkit. https://www.gov.uk/government/publications/hmrc-directors-loan-accounts-toolkit-2013-to-2014 ↩

  10. Finance Act 2025 Part 2 Chapter 4: Long-term UK resident. https://www.legislation.gov.uk/ukpga/2025/8/part/2/chapter/4 ↩

  11. GOV.UK: IHT416 -- Debts due to the estate. https://assets.publishing.service.gov.uk/media/5a7dceba40f0b65d88634883/IHT416.pdf ↩

  12. Inheritance Tax Act 1984 Section 160: Market value. https://www.legislation.gov.uk/ukpga/1984/51/section/160 ↩

  13. Inheritance Tax Act 1984 Section 166: Creditor's rights. https://www.legislation.gov.uk/ukpga/1984/51/section/166 ↩

  14. HMRC Shares and Assets Valuation Manual SVM108080: Sums due to/from the company. https://www.gov.uk/hmrc-internal-manuals/shares-and-assets-valuation-manual/svm108080 ↩ ↩2

  15. HMRC Shares and Assets Valuation Manual SVM111040: Categories of business property and rates of relief. https://www.gov.uk/hmrc-internal-manuals/shares-and-assets-valuation-manual/svm111040 ↩ ↩2

  16. Inheritance Tax Act 1984 Section 112: Excepted assets. https://www.legislation.gov.uk/ukpga/1984/51/section/112 ↩ ↩2

  17. Inheritance Tax Act 1984 Section 5: Meaning of estate. https://www.legislation.gov.uk/ukpga/1984/51/section/5 ↩

  18. GOV.UK: IHT419 -- Debts owed by the deceased. https://www.gov.uk/government/publications/inheritance-tax-debts-owed-by-the-deceased-iht419 ↩

  19. HMRC Inheritance Tax Manual IHTM28029: Non-repayment of liabilities deducted against the estate on death. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm28029 ↩ ↩2

  20. HMRC Inheritance Tax Manual IHTM28020: Liabilities -- borrowed money used to acquire assets qualifying for business relief. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm28020 ↩ ↩2

  21. Finance Act 2013 Schedule 36: Inheritance tax -- liabilities. https://www.legislation.gov.uk/ukpga/2013/29/schedule/36 ↩ ↩2

  22. Corporation Tax Act 2010 Section 455: Charge to tax in case of loan to participator. https://www.legislation.gov.uk/ukpga/2010/4/section/455 ↩

  23. HMRC Company Taxation Manual CTM61505: Close companies -- loans to participators -- general. https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm61505 ↩

  24. Income Tax Act 2007 Section 8(2): Dividend upper rate. https://www.legislation.gov.uk/ukpga/2007/3/section/8 ↩ ↩2

  25. Corporation Tax Act 2010 Section 458: Relief in case of repayment or release of loan. https://www.legislation.gov.uk/ukpga/2010/4/section/458 ↩ ↩2

  26. HMRC Company Taxation Manual CTM61655: Release or writing-off of loan or advance. https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm61655 ↩ ↩2

  27. Corporation Tax Act 2009 Section 321A: Exclusion of debits for release of loans to participators. https://www.legislation.gov.uk/ukpga/2009/4/section/321A ↩ ↩2

  28. Income Tax (Earnings and Pensions) Act 2003 Section 190: Death of employee. https://www.legislation.gov.uk/ukpga/2003/1/section/190 ↩ ↩2 ↩3

  29. HMRC Employment Income Manual EIM21742: Loans written off -- exceptions from charge. https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21742 ↩ ↩2

  30. Income Tax (Trading and Other Income) Act 2005 Section 415: Charge to tax -- release of loan to participator. https://www.legislation.gov.uk/ukpga/2005/5/section/415 ↩ ↩2

  31. Inheritance Tax Act 1984 Section 94: Charge on participators. https://www.legislation.gov.uk/ukpga/1984/51/section/94 ↩ ↩2 ↩3 ↩4

  32. HMRC Inheritance Tax Manual IHTM14851: Transfers by close companies -- introduction. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm14851 ↩ ↩2 ↩3

  33. HMRC Shares and Assets Valuation Manual SVM108270: Close companies -- transfers of value. https://www.gov.uk/hmrc-internal-manuals/shares-and-assets-valuation-manual/svm108270 ↩ ↩2 ↩3 ↩4

  34. Contractor News: Tax implications of converting loans to shares. https://www.contractor.news/articles/tax-implications-of-converting-loans-to-shares ↩ ↩2 ↩3

  35. M&G Wealth: Family investment companies. https://www.mandg.com/wealth/adviser-services/tech-matters/iht-and-estate-planning/planning/family-investment-companies ↩ ↩2

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