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Where Taxpayers and Advisers Meet

Benefits in kind

Tax in Whitby
Joined:Wed Aug 06, 2008 3:54 pm
Benefits in kind

Postby Tax in Whitby » Sat Jan 15, 2022 6:35 pm

I am the secretary and a director of a small company limited by guarantee that runs a private car park on unregistered land which is expected shortly to be registered as belonging to the company. Persons regarded as members of the company have informal licenses to occupy particular parking spaces on the land in return for interst-free loans made to the company to cover the capital costs incurred by the company to defend its action in occupying the land and to improve the site. It is proposed to convert the loans to long leases when the Lands Registry has registered the company's title to the land. I am concerned that this may result in tax and NI charges on both the company and the individuals (three of whom are directors of the company) if the value of a long lease is held to exceed the amount outstanding on the loan. Apart from the directors, the company has no office-holders or employees, and as the company is limited by guarantee there are no shareholders, so that any benefit arising cannot be regarded as a dividend.

Joined:Sat Feb 01, 2014 3:26 pm

Re: Benefits in kind

Postby bd6759 » Mon Jan 17, 2022 1:56 am

A dividend is a type of distribution. There are many types of distributions. Making assets available for the use of participators is not a dividend, but it is a distribution.

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