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Dividends vs Directors Loan?

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rrobby12
Posted by
Junior Member

09 May 23 #521041 by rrobby12

Topic started by rrobby12

Hi all,

my ex partner appears to be trying to reposition the dividends she has paid herself for a number of years as a directors loan instead (she is the director of her own company). I am unsure of why she would do this but perhaps there is some financial advantage to this? Does it instead show her as in debt and therefore she will get a better settlement? It seems pretty shady to me but can anyone explain to me what the intent might be here?

R

Rickoshea
Platinum Member

10 May 23 #521043 by Rickoshea

Reply from Rickoshea

I imagine they think it's some way to try and show they have a reduced income and/or reduce value of the Company by showing liabilities in some way.

Looking at a few law websites they seem to suggest that if you are taking from the Loan Account it still is part and parcel of the Company and also shows you have reasonable confidence in the existence and the Courts/Accountants can often see what is happening

Link will probably be hidden but Beyond Law Group had a page on such a scenario around the impact of the Directors Loan account on Divorce

www.beyondlawgroup.co.uk/how-is-a-direct...-treated-on-divorce/

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