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Directors Loan
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If he dies, it would be a debt of his estate, so it would be repaid as part of probate/liquidation. If it's him that owes the company and not you, then I'm not sure how your house would be at risk. Your accountant would be the best one to talk to, because it depends on how the loan has been set up (is there any security against it for example?)
Don't forget that whilst repaying it will remove any additional Corporation Tax charge, it will still be a benefit in kind so there will still be some tax to pay. -
I can't help but think this is a troll post....
ESC16 doesn't exist anymore. You have to liquidate your company.
You are really borrowing £400k from the company to be paid back in max 21 months? I think you have your sub 5k directors loan mixed up with a loan from the company which carries BIK and other complications.
Looking at the amount as well.... still think this is a troll post.'CUK forum personality of 2011 - Winner - Yes really!!!!Comment
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There are also IHT implications in the event of his death. The situation described is, in effect, a gift of 400k from the father to the son.
This will be a gift with reservation and will still be part of the estate on his death for 7 years.Comment
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If he is paying HMRC interest of 4% then BIK does not apply, or does it?
Also he will be living with me and paying me market rent, so wont be a gift with reservation? or have i got that wrong.
We will be doing a members voluntary liquidation.
Not sure what a troll post is, but dont think im one ????Comment
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Originally posted by mudbath View PostAlso he will be living with me and paying me market rent, so wont be a gift with reservation?
But you are right, it shouldn't be a gift with reservation if he is paying market rent for any enjoyment he gets out of it. If it is a GWR (and HMRC might try and argue) then it stays in his estate until death.
Lifetime transfers: introduction to gifts with reservation of benefitComment
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Originally posted by mudbath View PostIf he is paying HMRC interest of 4% then BIK does not apply, or does it?
Also he will be living with me and paying me market rent, so wont be a gift with reservation? or have i got that wrong.
We will be doing a members voluntary liquidation.
Not sure what a troll post is, but dont think im one ????
Or are you jnz in disguise? I think you are..."I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
- Voltaire/Benjamin Franklin/Anne Frank...Comment
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I have looked up what a troll is and unfortunately am not one
Just wanted some answers to a serious question! Thanks for the replies and info, I will just speak to a financial advisor from now on.Comment
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