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Where Taxpayers and Advisers Meet

Directors loan transfer on death

smallpc
Posts:3
Joined:Mon Jan 25, 2021 12:48 pm
Directors loan transfer on death

Postby smallpc » Mon Jan 25, 2021 7:52 pm

Wife and I are 50:50 shareholders in small (single property) buy to let company. The property purchase was funded by means of directors loans (50:50), and repayment of loan is how we take profit from the company. Question is - if one of us were to die, could the other inherit the dead persons directors loan account balance or would it be written off? Thanks

maths
Posts:8255
Joined:Wed Aug 06, 2008 3:25 pm

Re: Directors loan transfer on death

Postby maths » Tue Jan 26, 2021 9:49 pm

The outstanding loan due to the deceased director at date of death forms part of his/her estate for IHT purposes as it is an asset.

As such it could be assigned to surviving spouse if left to such spouse.

Subject to any Companies Act or Articles of the company of which I know nothing!

Incredulum
Posts:2772
Joined:Thu Dec 03, 2009 5:35 pm

Re: Directors loan transfer on death

Postby Incredulum » Fri Feb 05, 2021 1:01 pm

Companies Act is unlikely to complain. And unless you did something extremely clever (for which read 'peculiar' and I think you would know about it) when you set up the companies I cannot imagine the Articles of Association complaining either.


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