The 2019 Loan Charge

For those affected, the Finance (No. 2) Act 2017 contains some of the most significant changes to tax legislation in recent memory (the 2019 Loan Charge). Some of the clients we have advised in relation to the changes are considering entering into insolvency arrangements for their companies and personally; whilst a number are pursuing their negligent advisers for the losses suffered.

Example

• Company A is an owner managed medium sized business.
• In 2002 it has a good year financially and generated £2 million profit before tax.
• Historically, whatever profit Company A made was distributed by way of dividend. However, in 2002 Company A's accountant, Accountant & Co, contacts the directors of Company A to inform them of a more tax efficient manner to extract cash from the business;