Directors loan, company ceased trading and director deceased

wysesr2

I am trying to help sort out my next door neighbours estate for his wife.


He was a director of a limited company that ceased trading after he died. He had an outstanding directors loan and his estate will be paying this back to the administrators who are handling the winding up of the company.


I have received his final tax return to fill in but it appears as though the salary he received from the company was added to his directors loan so effectively when the loan is repaid by the estate he will have had no income for the year.


I probably need to engage an accountant to help with the return but would welcome thoughts and advise from the experts here on what to put into the return.....


Thanks!

pleasedelete

I dont quite understand your question but he could only pay himself a dividend (is it salary or dividend) if the company had retained profit. Are they asking for the loan and dividend back (beacause there was no funds to pay the dividend)

antrobus

wysesr2 wrote: »

....I have received his final tax return to fill in but it appears as though the salary he received from the company was added to his directors loan so effectively when the loan is repaid by the estate he will have had no income for the year....

His salary was his salary, and that's what goes on down on his final tax return as his income. If he died owing the company money this might potentially have tax consequences;

https://www.gov.uk/directors-loans/you-owe-your-company-money

wysesr2

The company went into administration following his death due to outstanding debts, the regular payments were made weekly and were salary.

Thanks for confirming the position re salary - I will look into the tax consequences further.