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Personal expenses paid through a director’s loan account represented an extraction of value

By Mark McLaughlin, September 2024

A director's loan account was used to pay certain personal expenses, which represented an 'extraction of value' within the proper meaning and effect of the business investment relief legislation. 

Summary 

A director's loan account (DLA) was used to pay certain personal expenses, which represented an 'extraction of value' within the proper meaning and effect of the business investment relief (BIR) legislation. 

Background 

The appellant was resident (but not domiciled) in the UK and was taxable on the remittance basis. In December 2016, a company (DCL) was incorporated, of which the appellant was initially the only director, and sole shareholder. DCL subsequently started trading. On 6 December 2016, the appellant remitted £1.5m million of his foreign income to the UK. On 7 December 2016, he received written advice from his legal advisers about BIR

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