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Director’s loan account balance was neither released nor written off for income tax purposes

By Mark McLaughlin, June 2025

A director’s loan account with a company that was placed into liquidation and subsequently dissolved was neither written off nor released, such that no income tax liability arose on the director under ITTOIA 2005, s 415. 

Summary 

A director’s loan account (DLA) with a company that was placed into liquidation and subsequently dissolved was neither written off nor released, such that no income tax liability arose on the director under ITTOIA 2005, s 415.  

Background 

The appellant was the sole director of a company (BOH). On 16 January 2017, BOH passed a resolution for the voluntary winding-up of the company and a liquidator (AR) was appointed. The DLA was overdrawn by £439,954. The liquidator’s report of his final account dated 18 March 2019 stated: “Enquiries were made with the Director with a view to reaching a settlement to discharge his

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