No release of debt had taken place for the purposes of the income tax charge on close company participators under ITTOIA 2005, s 415 in relation to a directors’ loan waiver scheme.
The appellants (in four separate appeals) were involved in similar directors’ loan waiver schemes. Under the arrangements, a board minute explained the company’s wish to release sums owing by the director by way of a bonus for the director’s services to the company. A deed was accordingly executed setting out the sums released. The company paid National Insurance contributions but not employment income tax on the released amounts and deducted the sums released from its taxable profits.
HM Revenue and Customs (HMRC) challenged the schemes. Income tax determinations were made under the Income Tax (PAYE) Regulations 2003, SI 2003/2682, reg 80 and corporation tax closure notices were issued by HMRC for the tax
