Loan to a friend from LTD

[kolata]

OK, if there's nothing dodgy, suspicious or illegal, then take the money out of your personal account and lend it to your mother in law. Then there's no issue with your company. Avoid all the grief by making it a personal loan, not a company loan.

Or, to put it another way, why are you wanting to loan the money from your company?

If something is allowed, I want to do it.
Why not going any other way is irrelevant.

[kolata]

A quick Google search yielded this:-

Loan from LTD company to family member | UK Business Forums

from the same page:

[The above is deliberately kept simple to get the message across, so please don't nitpick about dates of repayment or reductions for payments within 9 months]

However it is not clear to me if the loan is repaid on time does the above change?

[kolata]

EDIT: MrMarkyMark makes a good point, a loan from company to a relative of a director or shareholder can be treated as a loan to participator anyway so the s455 issue will be applicable regardless of whether you arrange the loan directly between YourCo and MIL or via you personally. This should mitigate the issue of suspicion of tax avoidance because s455 exists to stop this from ever being an issue.

That is a logical thinking, yes. I know the rules for dir loan, my question was are they the same for relatives. It seems they are.

[stek]

Thanks for your concerns guys. I consider this move to be very low risk.
As you know there is a risk involved in going to the toilet as well. But we all go.

My question was merely about the legality of it.
As always very little help.

Seems obvious you are just waiting for the answer you want.

Like I said don't do it but if you do expect close scrutiny from HMRC because even from this distance, there is a definite piscine odour......

[kolata]

even from this distance, there is a definite piscine odour......

you wish.

[WTFH]

If something is allowed, I want to do it.
Why not going any other way is irrelevant.

It's totally relevant.

Many things are "allowed" but that does not make them a good idea.

What has your accountant told you?

[kolata]

It's totally relevant.

Many things are "allowed" but that does not make them a good idea.

What has your accountant told you?

That is it OK. I want to be 100% sure.
Your point exactly: one acct might say it is OK, other might say it is NOT OK (based on the notion it is a stupid thing to do and MIGHT cause problems in future). Hence the need for second opinion.
However I want to know what the law says, and make a decision.

[stek]

you wish.

Ok, a definite Surströmming odour then.....

[kolata]

Ok, a definite Surströmming odour then.....

Ich spreche kain Deutch.

[MrMarkyMark]

from the same page:



However it is not clear to me if the loan is repaid on time does the above change?

Why on earth would it? It seems crystal clear to me.

In fact the author wrote that to prevent any further idiotic questions, such as yours, on that thread