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Chapter EIM42735

Document Cited in Related
Vincent
Published date22 May 2014
Record NumberEIM42735
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

Where:

  • a company has gone into liquidation and
  • a director’s undrawn remuneration has been lost because there are insufficient funds to pay it

then the employment income may be reduced by the amount of undrawn remuneration that is lost, provided certain conditions are satisfied. The employment income should be reduced whether or not any assessment or self assessment is final. The conditions that have to be met are:

  • the director is a creditor for the undrawn remuneration in the statement of affairs prepared in connection with the liquidation and
  • the remuneration was at no time capable of being drawn by the director having regard to the financial state of the company and
  • no additional corporation tax would be payable if the undrawn remuneration was to be disallowed in computing the company’s profits or losses...

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