Couldn't find exactly what I was looking for in the forums so don't shoot me down if I missed it.
I have a number of home improvements that need undertaking on my two properties. I was planning on funding these by payment of dividends, but there are two downsides:
So I got to thinking, wouldn't it be a smarter move to draw up a commercial/beneficial loan from my Ltd company to myself, giving:
Also, would the loan to me, lower the company's Corporation Tax liability?
Seems like a no-brainer here. What am I missing?
Thanks
I have a number of home improvements that need undertaking on my two properties. I was planning on funding these by payment of dividends, but there are two downsides:
- 8.75% interest on dividends (basic rate)
- 33.75% higher rate tax would be breached
So I got to thinking, wouldn't it be a smarter move to draw up a commercial/beneficial loan from my Ltd company to myself, giving:
- A much lower rate, think it's around 2.5% currently
- A longer payment schedule
- The ability to take more dividends for 'other purposes'
Also, would the loan to me, lower the company's Corporation Tax liability?
Seems like a no-brainer here. What am I missing?
Thanks
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