This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

DLA avoidance: The ‘30-days rule’.

Shared from Tax Insider: DLA avoidance: The ‘30-days rule’.
By Jennifer Adams, April 2022

Jennifer Adams looks at the anti-avoidance rules applicable to ‘participators’ borrowing from a family company. 

A method by which cash can be extracted from a family company is to borrow from that company. The benefit for the borrower is a short-term loan, interest-free, with no completion of application forms and no refusal by a bank.  

However, care is needed to ensure that the loan or advance does not fall foul of the rules for ‘loans to participators’ if it is not repaid within nine months after the end of the company's accounting period. 

Usually, the borrower will be a director or shareholder of the company. However, the rules apply to anyone deemed to be a 'participator,' i.e., anyone (or their associate) with a financial interest in the company (excluding a bank operating in the ordinary course of its business, or trade creditors of the company). 

This is one of our 2205 Premium articles

To see this article in full and unlock access to our complete library of 2205 articles click 'subscribe & unlock' below:
SUBSCRIBE & UNLOCK

Subscriptions include a 14 day free trial
+ money back satisfaction guarantee

Start your free trial today

Interested in receiving the latest monthly tax saving tips? Start your 14 day free trial to our newsletters today.