Loaning money from the company for three months?

**ASB** · 17 April 2009, 17:16

Originally posted by oxtailsoup View Post

I know that there are rules governing taking money out of the business (as a loan) and then repaying it, but I'm not sure of the rules. i.e. are the rules dependent on how long you loan the money for etc?

We are in the process of buying a reposessed house as an investment and our plan is to buy the house for cash. Tart it up a bit and then mortgage it. If we mortgage it after the house has been modernised a bit we should be able to secure a higher valuation and thus a higher mortgage based on 75% of property value.

So we were wondering if we could take £50k out of the business account for 2/3 months and then put it back again?

Thanks for any advice!

Yes, but you should pay interest at the "offical rate" - see HMRC - otherwise the interest in a benefit in kind. Also it needs to be paid back within 9 months of the year end otherwise it will attract a tax charge of 25% (repaid when the loan is repaid).

**Olly** · 18 April 2009, 19:52

yes no problem...you pay 4.75% on 45K of it and if the company owes u any money you can offset that too

**BrilloPad** · 18 April 2009, 20:29

My accountant doesn't care what I do as long as it is all square by company year end.

**oxtailsoup** · 20 April 2009, 08:09

Thanks for the replies Guys.

**kookachoo** · 21 April 2009, 15:17

http://www.hmrc.gov.uk/ct/returns/director-loan.htm

My accoutant said something about a £5k limit...

Loaning money from the company for three months?