I am assuming the official interest rate for beneficial loans between company and employee will be reduced fairly soon.
If it does, I am considering making a fixed interest loan for a fixed period to take advantage of EIM26152. The terms of the loan would be something like:
1) Variable loan amount from company to employee
2) Fixed period of say 10 years
3) Fixed rate of interest will be official rate at the time the loan is initiated (currently 6.25% I think, but hopefully reducing soon)
4) Minimum loan of £100 must be maintained throughout the term of the loan
With the above terms, would I be able to take advantage of EIM26152? I will need to get it checked by HMRC anyway, as it says this exemption must be referred to an inspector.
I was hoping take take advantage of a cheap rate loan for 11 months of the year, which would be repaid in the 12th month (up to £100) to avoid S419 issues. Interest due on the loan would be actually paid to the company, as would the repayment in the 12th month.
Does this sound ok? Or are there any other issues I need to consider?
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