Intercompany Loan SPV Intercompany Loan SPV - Page 3
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  1. #21

    Fingers like lightning


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    Quote Originally Posted by Craig@Clarity View Post
    Yes I'm sure about this. Ask him about Franked Investments
    Let me correct myself. They used to be called Franked Investments but since the change in 2016 and the abolition of tax credits, it's simply exempt from CT if the dividends are from UK company to UK company. You'd just adjust for the dividend income on the tax computation. Still no CT consequence though

  2. #22

    More time posting than coding


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    Quote Originally Posted by Craig@Clarity View Post
    Let me correct myself. They used to be called Franked Investments but since the change in 2016 and the abolition of tax credits, it's simply exempt from CT if the dividends are from UK company to UK company. You'd just adjust for the dividend income on the tax computation. Still no CT consequence though
    Agreed.

    If your accountant is advising you dividends are taxable when received by a company, I would recommend you get another accountant - that's basic stuff.

  3. #23

    Nervous Newbie


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    Quote Originally Posted by Craig@Clarity View Post
    Let me correct myself. They used to be called Franked Investments but since the change in 2016 and the abolition of tax credits, it's simply exempt from CT if the dividends are from UK company to UK company. You'd just adjust for the dividend income on the tax computation. Still no CT consequence though
    Thanks for the clarification and you are indeed correct. I may have misconstrued this due to my accountant setting this up a certain way in FreeAgent. It appears FreeAgent can not handle this scenario and shows the dividend is liable to CT.

    In reality, the accountant would adjust for this in the tax computation separately regardless is what FreeAgent is showing.

  4. #24

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    Quote Originally Posted by LoanCharged View Post
    Thanks for the clarification and you are indeed correct. I may have misconstrued this due to my accountant setting this up a certain way in FreeAgent. It appears FreeAgent can not handle this scenario and shows the dividend is liable to CT.

    In reality, the accountant would adjust for this in the tax computation separately regardless is what FreeAgent is showing.
    That would be the best way (for your accountant to adjust for it separately). However, if you're dead set on having Freeagent give you a more accurate estimate, the work around that I can see would be to create an admin expense account and untick the box that says allowable for tax. Yes, it's an expense account rather than an income/sales account and you'll end up with a credit balance on this newly created account, but it could work out your CT more accurately. I've not tried or tested it but if my logic is right, it's a rough and dirty work around.

  5. #25

    Nervous Newbie


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    Quote Originally Posted by Craig@Clarity View Post
    That would be the best way (for your accountant to adjust for it separately). However, if you're dead set on having Freeagent give you a more accurate estimate, the work around that I can see would be to create an admin expense account and untick the box that says allowable for tax. Yes, it's an expense account rather than an income/sales account and you'll end up with a credit balance on this newly created account, but it could work out your CT more accurately. I've not tried or tested it but if my logic is right, it's a rough and dirty work around.
    I think I have cracked it! I created a new Income category called (Intercompany Dividend) and allocated the payments to that. I then added a journal entry moving the Intercompany Dividend to the Contra account. The P&L now looks spot on as does the Balance Sheet.

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