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The Quick Answer
No, you do not need to.
If you are about to do a Members’ Voluntary Liquidation, then we can distribute the overdrawn directors’ loan to you as a distribution in specie. This means you do not need to pay it back.
We effectively transfer the company asset, of the loan you owe back to your company, to you and this cancels out the loan.
You may have paid tax on the overdrawn loan (called section 455 tax) and then we reclaim this back after the liquidation.
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The earlier you get advice, the more options you are likely to have. We can help directors, shareholders and creditors across England and Wales.
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David Kirk
ACA FABRP
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Tax: It can take nine plus months for HM Revenue and Custom to repay Section 455 tax to us. So be careful if you are relying on this money as it does not come back quickly.
