I've read an article by a legal professional that discusses the following strategy; (A) Individual takes a loan from X (B) That individual uses the loan to make a director’s loan to their company (C) The loan from X is novated to the company. (D) The company repay the loan for which it is now liable by way of the novation. (E) The individual continues to have a director’s loan account from which they can withdraw funds without tax.
Accepting that under the rules of novation, the lender X must agree to the novation (ie: assignment won't work).
Any thoughts on the legalities of this please?
(NB: The article I read was a few years old!)
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