Loans vs expenses between companies

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TheFaQQer replied

28 November 2017, 10:44
Originally posted by WTFH View Post

What does company z get out of the deal?

I think that's the key here - what are they invoicing for? What does the paperwork say between the two companies?

Sounds like a loan to me, but there's so little information here it's just a guess. I'm just unconvinced that one company giving another company some money and invoicing for it (what are the payment terms? Is there interest applied? etc) can be anything other than a loan.
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Lance replied

28 November 2017, 09:18
Originally posted by Kk01 View Post

I am having a heated discussion with my accountant over ......

He's right. You're wrong.
If you disagree very strongly then get a new accountant.

HTH.

EDIT: Looking at the description it sounds too complicated. A bit like "a tax
arrangement is any arrangement which, viewed objectively, has the obtaining of a
tax advantage as its main purpose or one of its main purposes."
Source : https://www.gov.uk/government/public...ti-abuse-rules

Last edited by Lance; 28 November 2017, 09:23.
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northernladuk replied

28 November 2017, 09:07
The invoices are sent to company z so that would in some way make it an expense.

I'm probably being really thick here but what is this supposed to mean?
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WTFH replied

28 November 2017, 09:04
Originally posted by Kk01 View Post

Hi all,
I am having a heated discussion with my accountant over the following situation:

Company x manages but to let properties and does not have enough capital to purchase properties so company z provides the capital. The invoices are sent to company z so that would in some way make it an expense. However, since company z is providing the capital, there is also the argument that company z is loaning company x, thus a loan and taken as a whole into the taxable income. Have any of you had this experience? How did you manage it?

You're going to have to provide us with more information.
Which company purchases the properties?
Which company name are the properties in?
Are the two companies in any way related?
What does company z get out of the deal?
What does your accountant say?
What do you think?
What answer would you like us to give you?
Leave a comment:
Kk01 started a topic Loans vs expenses between companies

28 November 2017, 07:50
Loans vs expenses between companies

Hi all,
I am having a heated discussion with my accountant over the following situation:

Company x manages but to let properties and does not have enough capital to purchase properties so company z provides the capital. The invoices are sent to company z so that would in some way make it an expense. However, since company z is providing the capital, there is also the argument that company z is loaning company x, thus a loan and taken as a whole into the taxable income. Have any of you had this experience? How did you manage it?
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