I am aware that if a further director's loan is taken within 30 days of a previous loan being repaid, or if there is the intention to take a further loan at the time of the repayment, then this is considered "bed and breakfasting" by the Revenue and tax under Section 455 will apply.
HOWEVER I read somewhere recently that "These provisions do not apply where the repayment itself gives rise to a charge to income tax, so where a dividend or salary/bonus has been used to repay the loan balance then these rules do not apply."
Is this true? I always repay DLs from dividends rather than with cash so this is pertinent and interesting, if indeed it is correct!
Does that mean that you can repay a loan from dividends and take a further loan at any time thereafter without S455 penalty? (With the proviso that the other rules around BIK and repayment within 9 months of year end etc still apply).
With thanks
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