Putting company money on your mortgage

[THEPUMA]

I am an accountant and several of my clients do this. None have yet been challenged. There was an article some time ago in Taxation which agreed that it was possible to do. I think the detail is important here. What I recommend is that the monies are transferred from the limited company account to an account named "on behalf of XYZ Limited". A deed of trust should then be signed by the company stating that the money is held on behalf of the company and is not available for personal use.

Even if it were to be successfully challenged, I believe there is still a saving. It is just subject to tax.

[Ardesco]

I am an accountant and several of my clients do this. None have yet been challenged.

Are you chartered ?

[Nixon Williams]

I am an accountant and several of my clients do this. None have yet been challenged. There was an article some time ago in Taxation which agreed that it was possible to do. I think the detail is important here. What I recommend is that the monies are transferred from the limited company account to an account named "on behalf of XYZ Limited". A deed of trust should then be signed by the company stating that the money is held on behalf of the company and is not available for personal use.

Even if it were to be successfully challenged, I believe there is still a saving. It is just subject to tax.

I would not consider it wise to advise this to clients, just because it has not been challenged does not mean it is ok - the Revenue can miss many things, it is always best advice in my view to keep private and company money separate.

Alan

[THEPUMA]

I am chartered and have the PCG QA accreditation.

It is very easy to advise clients not to do things because they may be challenged. I think that is lazy accounting. Some clients are interested in more aggressive arrangements than others but as an accountant it is my job to make sure every client is aware of the various possibilities available to them and the levels of risk attached to each.

If anyone can give me any legislation or case law that specifically precludes this arrangement I would be most interested to hear it.

The only thing I can think of is that a director is failing his fiduciary responsibility to the company but what are the ramifications of that? Normally, it is only the shareholders of the company who would tend to sue the director in these circumstances but in each of my cases, the company is wholly owned by the director and his/her spouse.

[Nixon Williams]

It is very easy to advise clients not to do things because they may be challenged. I think that is lazy accounting.

I would agree that there are clients that would be intertested in what you say, my point is that when private/company money starts getting mixed up, this can lead to problems - in my experience clients that have done this sort of transaction get into difficulties, I see my role at trying to prevent that.

Clients are free spirits and can make their own choice......

Alan

[tim123]

I am chartered and have the PCG QA accreditation.

It is very easy to advise clients not to do things because they may be challenged.

You seem to have missed the difference between "not advising clients not to do something" and "advising them to do it".

tim

[THEPUMA]

I think you may be missing my point. It is easy not to advise people to do something that may be risky. I don't take the easy approach so therefore I do advise clients of the possibility of doing something which may be challenged, provided they are comfortable with the associated risk.