Inter company loans - no interest payment

by **peacock** on Tue Jul 05, 2011 12:33 pm

The propritor of two companies
Company a
Company b

He is loaning Company b blocks of £5,000 and £10,000 totalling £35,000. over a period of 4 months.
No interest is being paid on the loans and no timescales have been put in place to collect the monies owed.

I have posted the loans to the balance sheet.

Is their any tax liability I need to be aware of, would the HMRC need to be informed.

If the loans are not repaid can I transfer the balance to the Profit and Loss?

Many thanks

by **section 44** on Tue Jul 05, 2011 2:09 pm

The title refers to "inter-company loan" - that is, a loan from one company to another company. You also refer to Company A but yet it doesn't appear relevant in what you then describe.

by **peacock** on Tue Aug 02, 2011 4:34 pm

Apologies,
I work for Company a.
I am posting the loans to Company b into our accounts.
I did not know if their are any tax liabilities to be aware of as these loans may or may not be repaid, as the proprietor of both companies is using the profit of company a to help fund company b
Hope this helps clarify.
Accounting wise they have been dealt with correctly.

Thanks