A settlement agreement between the taxpayer and company liquidator and subsequent correspondence constituted the release or write‑off of a director’s loan account balance, such that an income tax liability arose.  

Summary 

A settlement agreement between the taxpayer and company liquidator and subsequent correspondence constituted the release or write‑off of a director’s loan account balance (within ITTOIA 2005, s 415), such that an income tax liability arose.  

Background 

The appellant was the sole director and shareholder of a company (SE). SE’s accounts and corporation tax return for the accounting period ended 28 February 2013 recorded a director’s loan account (DLA) balance of £151,802 owed by the