HMRC Guidelines 480, Chapter 17

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ChimpMaster replied

6 January 2011, 15:36
You can loan from one company to another company without facing s419 tax, and without having to worry about the rules above (as far as I am aware).

It depends what you want to do with the money.
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Clare@InTouch replied

6 January 2011, 14:58
Originally posted by moromou View Post

What happens if the company is overseas registered, and the loan is made to me through their overseas head quarter. Would that make any difference in terms of CT deduction (i guess that will depend on the tax rules of the overseas country?)

You would need to check the rules in the country the company is incorporated in. Also bear in mind that if a loan is written off then there could be personal tax issues there too.

I would suggest you get specialist advice if there is an overseas element to this.
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moromou replied

6 January 2011, 14:51
Originally posted by Clare@InTouch View Post

Sure, but the company will pay extra CT under section 419 on it. That means 25% of the balance of the loan.

What happens if the company is overseas registered, and the loan is made to me through their overseas head quarter. Would that make any difference in terms of CT deduction (i guess that will depend on the tax rules of the overseas country?)
Leave a comment:
Clare@InTouch replied

6 January 2011, 14:35
Sure, but the company will pay extra CT under section 419 on it. That means 25% of the balance of the loan.
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moromou started a topic HMRC Guidelines 480, Chapter 17

6 January 2011, 14:32
HMRC Guidelines 480, Chapter 17

What do you guys think of this?

HMRC Guidelines 480, Chapter 17, Section 177

Exemption for loans for fixed periods at fixed rate of interest
No chargeable benefit to director or employee at any year of assessment if loan is made:
* for a fixed and invariable period
* at a fixed and invariable rate of interest
* when loan is first made, rate of interest no less than official rate (currently 4.75%)

There's no mention of the loan size, and apparently if the above criterias are met, not needed to be reported on P11D.

Let's hypothetically say your employer waives the loan in the future or the repayment period is set to something like 200 years from now. This is totally legal by the books?
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