S419 / S455 loan account

[tom 7000]

Mes amies

I have a new client.

Last year his loan account was £200k o/d and I said to the old accountant wheres the S455 tax and he said.....

None due it was repaid within 9 months of the year by the directors declaring a dividend of £200k (ie in next income tax year) and I said fair enough but during the current year hes taken a further £240k in cash so the balance in this years co accts is 240k

He said thats ok declare a dividend after the year end in the next income tax year to clear it.

Now

1) are they two separate loans and I can get away with that or

2) is it one giant pot where money goes in and out and when the divs are declared they can be allocated to the oldest balances and this stands or

3) Are the divs allocated to the cash taken in the current year and really he has last years balance of 200 + 38 extra from this year and S455 is due

Comments greatly appreciated

Yes I know company law says loans are illegal and at this level I have a mind to tell him to take his business elsewhere...as it seems like sharp practice to me...

Tom and co

[tom 7000]

Re Claytons Case = Oldest debt repaid first