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Where Taxpayers and Advisers Meet

Effect of loan on Benefit in Kind.

Joined:Wed Aug 06, 2008 3:50 pm

Postby exorsi » Thu Mar 01, 2007 5:57 am


1. I am the Co. Sec and I hold 25% shares in my wifes company. Can I borrow £85k from the company reserves to fund the purchase of a letting property?

2. I have read on the IR website that there is a standard rate for loans, presently at 5%. If i pay the interest would I need to declare the loan on P11D?


Joined:Wed Aug 06, 2008 3:13 pm

Postby » Thu Mar 01, 2007 6:01 am

don't forget s419 'tax'.

Joined:Wed Aug 06, 2008 3:49 pm

Postby Taxingtimes1976 » Thu Mar 01, 2007 12:17 pm

If you paid the company interest at the authroised rates then ther would be no benefit in kind assessable on you.

However, as you are a shareholder, you are a 'participator' in the company and as such, the company could be required to pay (refundable) tax of up to 25% of the balance advanced to you.


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