Money traansfer between two limited companies

[p646]

Hi

I have Limited company A with profit of 200K every year and got 200k balance after corporation tax
two directors me and my wife 51%--49%, we are taking 60k every year as dividends

I have opened a New limited company B to buy properties, Two directors me 25% wife 75%

Can I transfer Company A funds to Company B to buy properties? Will it be consider as avoiding dividends tax?

will they be consider as associates company?
Can Company A can loan Company B and what formalities i have to do? (like paying interest on loan amount)

will very thankful for this help

B

[pawncob]

Under the new rules the small company profit rate of corporation tax will be abolished so most companies will pay tax at 20%, and issue of “associated companies” no longer applies.

There is no requirement to charge interest on loans. If you do, do not deduct income tax from the payment of interest to a company as would be required on a loan from an individual.

It would be prudent to have paperwork setting out the terms of the loan (repayment and any interest) signed on behalf of both companies.

[p646]

So. There is no problem

I can transfer the funds from one to another associate limited company.
That will be counted as a loan,
Loan term can be repayments after 5 years.

Thanks for your help