HMRC interest on loan

[Olly]

Still don't understand what's wrong with a BIK? It doesn't result in castration - just declare the BIK and pay the tax on the BIK. Don't pay the interest that's more expensive that the tax, and you will pay tax again if you ever withdraw the money.

Edit: And your company will pay corp tax on the interest coming from you.

so what % is the tax if you go the BIK route?

[css_jay99]

ok calculations as i see it, i'm probably wrong.

Intended loan amount is £10,000
Assuming that directors loan of £5000 has been used up and that the £10k loan will be fully paid in 1yr.

options
1 Balance transfer option where i am under HighRate tax band
3% balance transfer fees will mean cost of loan = £300
Add on 10% tax on dividend of £10,300 to pay loan off = £1030
hence Cost of loan = £1330

2 Balance transfer option where i am over HighRate tax band
3% balance transfer fees will mean cost of loan = £300
Add on 32.5% tax on dividend of £10,300 to pay loan off = £3347 ( £1144 tax credit)
hence Cost of loan = 300+3347-1144 = £2503

3 Company loan Attracting Benefit in Kind at highRate Tax band?


can anyone provide rough estimates for option 3.

cheers


css_jay99