Company A lends money for less than the official rate to company B. Company B is 100% owned by a director of company A.
The director is not a participator in company A and there is a legitimate reason to lend the money to company B rather than the director himself (company B is buying a holiday home for director's use).
So far as I can tell, this is not directly caught by the beneficial loan rules as that covers loans to employees/officers or their relatives; it doesn't mention a connected company.
However, I find it hard to believe this arrangement doesn't trigger income tax. It could be the disguised remuneration rules?
Can anyone confirm that it is income tax free or suggest how it might be caught? I can do the research but I'm worried about unknown unknowns.
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