Q&A: inheritance tax and a director’s loan

In this week’s Q&A, Ibrahim Nalla ATT CTA, tax adviser at Croner-i VIP Tax Team, explains the inheritance tax implications of a director’s loan assignment, including chargeable transfers and chose in action rules

Our client is a director and the sole shareholder of a UK company and wants to know his inheritance tax (IHT) position ahead of the forthcoming changes to business property relief (BPR) in April 2026.

The client currently has a credit director’s loan account (loan) owing to him from the company and as part of IHT planning we want to consider the IHT implications of assigning the loan to his adult children. No interest is being charged by the client on the loan.

All references below are to Inheritance Tax Act 1984 (IHTA 1984) unless stated otherwise.

Your free features:

Breaking news and expert analysis
Customisable daily newsletters
Six free CPD learning modules each year
Personalised CPD tracker
Top 75 Firms league tables
Regulatory changes
Hardman’s Tax Data

Tax | Personal tax changes from 6 April 2026

Tax | Residential landlords under pressure: rethinking ownership

Tax | Will 2% property income tax rise be last straw for residential landlords?

Tax | Farmers given £2.5m allowance for inheritance tax in u-turn

Tax | Nine ways to beat the Budget tax tsunami

Navigate

Tax Services

Your free features:

Sign up to Business & Accountancy Daily