VCM25070 - EIS: income tax relief: connection with the company: permitted payments to directors
ICTA/S291A (3); ITA/S168 (2) & (3)
In determining whether a director is a 'paid director' for the purpose of VCM25060, certain payments are ignored. They are as follows:
- any payment or reimbursement of expenses which are wholly, exclusively and necessarily incurred by the director in the performance of his duties,
- any interest which represents no more than a reasonable commercial return on the amount lent,
- any dividend or other distribution which does not exceed a normal return on the amount invested,
- any payment for the supply of goods which does not exceed their market value,
- any payment of rent which does not exceed a reasonable commercial rent,
- any reasonable and necessary remuneration which:
- is paid for services rendered in the course of a trade or profession, other than secretarial or managerial services or services of a kind provided by the person to whom they are rendered,
and
- is taken into account in calculating for tax purposes the profits of that trade or profession.
