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Where Taxpayers and Advisers Meet

Inter company loan write off

simpsonite
Posts: 96
Joined: Wed Jun 24, 2009 11:58 am

Inter company loan write off

Postby simpsonite » Thu Mar 19, 2015 4:50 pm

I have a builder company client. He wants to set up another company to buy residential property & rent out.
He wants to know if he could transfer £380,000 from his existing company to his new company, thus showing a loan in both accounts.
Can this be done & would HMRC accept this type of arrangement?
My feeling is that it can't be done not least because the two companies would be connected?!
Surely HM Revenue would see this simply as a form of tax avoidance?

Thoughts much appreciated

Simpsonite

pawncob
Posts: 4342
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: Inter company loan write off

Postby pawncob » Thu Mar 19, 2015 6:19 pm

How is the tax being "avoided"?

No problems with this arrangement.
With a pinch of salt take what I say, but don't exceed your RDA

simpsonite
Posts: 96
Joined: Wed Jun 24, 2009 11:58 am

Re: Inter company loan write off

Postby simpsonite » Mon Mar 23, 2015 2:56 pm

yes, on reflection the money lent is still being held inside his newco so no tax avoidance in any way.
ok thanks
pawncob


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