Question asked:

0
0

A company makes an income tax payment on their year-end 31/12/2016 CT1 under section 438 TCA 1997. What is the final date the loan has to be repaid in order for the company to be refunded this income tax charge in full? The four year rule would suggest 31/12/2020, however if the claim for repayment is made on the year-end 31/12/2020 CT1, the claim would not be submitted until the return is filed in 2021 which is outside of the four year rule.

RESOLVED
Marked as spam
Posted by (Questions: 3, Answers: 4)
Asked on 9 November 2019 10:01 am
35 views
Kevin, this is Ronan. When is signed up to this service we were told that each question would be answered by a Tax Guru, hence I was looking forward to hearing your answer. We are not tax consultants. Can you please clarify the following which the client will ask: (1). "four years of the event" - what event? (2). "for a very long time" - does this mean 2025, or 2099? (3). "the claim should be made" - how do we make a claim in 2025?
( at 15 November 2019 8:06 am)
Hi Ronan. Is there anything about my answer that you are unsure of? In relation to the loan, it should be a matter of fact that the loan is forgiven, and in that case it would no longer appear in the company accounts and the participator would no longer be subject to BIK on the loan. The claim is made on the company’s CT1 for the period in which the loan is repaid.
( at 15 November 2019 6:43 pm)
0
Private answer
Awaiting answer.
Marked as spam
Posted by (Questions: 3, Answers: 4)
Answered on 14 November 2019 6:53 pm
Joe, your question was answered! The four year rule applies to tax refunds, the tax is only refundable when the loan is actually repaid. If the loan is repaid in 2025 then that’s when the refund of income tax will be due.
( at 14 November 2019 8:11 pm)
0
Private answer
The four year limit does not affect this. The repayment will be claimed when the loan is repaid. The four year limit applies where a claim is not made within four years of the event. The claim should be made as soon as the repayment occurs If a loan were left for a very long time there could be an argument it had actually been forgiven.
Marked as spam
Posted by (Questions: 2, Answers: 164)
Answered on 9 November 2019 6:53 pm
A company makes an income tax payment on their year-end 31/12/2016 CT1 under section 438 TCA 1997. What is the final date the loan has to be repaid in order for the company to be refunded this income tax charge in full? The four year rule would suggest 31/12/2020, however if the claim for repayment is made on the year-end 31/12/2020 CT1, the claim would not be submitted until the return is filed in 2021 which is outside of the four year rule.
( at 14 November 2019 3:24 pm)