Moving funds between companies

[Stimpy]

Hi all,
my first thread with a few questions
I will hopefully start contracting soon and my wife is about to start her own company (fashion).
Initially I will be bringing in most of the revenue, until her company really gets under way.
Would it be possible to move funds from my ltd company into her company (e.g. as an investment), so she could pay herself a salary thus getting around 660?

Also what are the rules on company bank accounts, can they be sub accounts of a personal account? This could potentially be usefull as I have an offset mortage and any funds coming in to a business sub account will obviously reduce any interest on my mortgage?

Cheers for any advise


Stimpy

[Lucifer Box]

Stimpy, before doing anything get a good accountant and seek professional advice. Any advice you get here on such large and important matters is worth exactly what you paid for it and you would be mad to act on it.

Do not fall into the classic first timer's trap of treating company money as your personal slush fund. Running your company account out of your personal account is simply asking for trouble and you would be crucified at the first HMRC inspection. Don't do it.

There are ways in which you can invest in the startup of another company and get tax relief on your investment, but you need professional advice and assistance to make sure it is done correctly

[boredsenseless]

Stimpy, before doing anything get a good accountant and seek professional advice. Any advice you get here on such large and important matters is worth exactly what you paid for it and you would be mad to act on it.

Do not fall into the classic first timer's trap of treating company money as your personal slush fund. Running your company account out of your personal account is simply asking for trouble and you would be crucified at the first HMRC inspection. Don't do it.

There are ways in which you can invest in the startup of another company and get tax relief on your investment, but you need professional advice and assistance to make sure it is done correctly

And just in case the above is not clear enough

NEVER use company money to offset a personal mortgage! At best it will be classed as the company loaning the money to you (big tax due) at worst its fraud... neither of which you really want to get into...

[ASB]

NEVER use company money to offset a personal mortgage! At best it will be classed as the company loaning the money to you (big tax due) at worst its fraud... neither of which you really want to get into...

Wise advice, and if followed will negate any possible issues, but....

It is permissible for the company to loan people money. There are some rules if it is a director and also they are rules about when the loan must be repaid (basically 9 months after year end).

There are taxation consequences of this. In a nutshell tax will be payable on the benefit in kind (basically the interest not paid). The kicker is CT. If the loan is not repaid by the due date then CT is payable. This is reclaimable when the loan is repaid.

As for fraud, you'd really have to work at it to get that far. If the loans were not correctly declared in the books then it would be possible. If intent could be shown that the money was intended to be stolen then it would be possible.

There is a question as well that the loans are illegal under the companies act anyway. The point is probably moot because it would need a complaint from the members to proceed. The taxman cannot instigate proceedings because of it. Of course that may change.

It is perfectly permissible for your company to loan money to your wifes. It can make an investment in it if it so wishes (although there are issues here with the valuation paid for the shares). Or, you could alway go into business together, which may prove more cost effective. One set of charges not 2...