Lendig money to GF to start a business...

[tractor]

...

Aaargh, some of your comments are insightful and helpful, and yet sometimes you treat the forum as if you are your sig picture. Isn't it my prerogative to ask any bowlox I like - like is AndyW's mum as good as I've heard? And yours to ignore anything you find tiresome irksome or repetitive? Otherwise you are in danger off putting of the newbie's who do ask repetitive questions, but for someone like me - I'll answer them - for now. Till I get bored, and then I'll stick The Joker as my sig and tell them to F Off! Don't forget some people just want to chat as if they were in the pub, and not be told they can't have a conversation about who will win the premiership because it has already been discussed.

Idea number 24... can I claim time spent on CUK is working time whilst working at my client site and invoice for it, it is sort of work related?. You must be doing that surely - judging by the number of your posts? Or are you based in Oz and you work whilst we are asleep ?

PS It's 5k. I can lend her 1k now for bits and pieces to be paid back by December 2013 then she'll get another 4k for stock in April 2013 to be paid back December 2014. I've actually got no money of my own to lend her, I just got divorced, bought a new house and furnished it. Thankfully the company has plenty of money in it should the fans go a muddy brown colour. That's whats driving this questioning, I'm not trying to avoid tax, but trying to get her the money in the best way possible FOR ME, and make my life more financially secure as her earnings could increase tenfold by working for herself. I did consider starting her up "within" my company or as a subsidiary, but it's too early for that. Although we've known each other socially for years, its still early days.

I've used my 20% tax limit for the year getting my mortgage deposit out, and dont really want to use my own directors loan to fund her business... just in case. I have first hand experience of dodgy girlfriends who seemed nice. One who used my credit card without my permission.

Some good points and some very good points

I would suggest you keep it simple don't have a chain of loans. Your co is at liberty to make a commercial loan on commercial terms directly to her and given the amount of interest you DON'T get from a bank these days, 1% would be sufficient to justify the loan, just make sure you have a good loan contract signed.

However, I am sure lots of us have had similar experiences with less than trustworthy ex's; have you considered telling her to go to a bank? Yes it will cost more, no doubt but that might be a big saving for you in the long run.

[Kanye]

BTW 4% of £1000 is £40, 4% of £5000 is £200. You dont trust her with your £1000 but you will make her a director of your LTD to mitigate that?

[Kanye]

For a grand, just give it to her mate. It's really not worth the effort.

If I asked my girlfriend to borrow that sum and she wrote up a repayment agreement and started talking to the accountant about tax mitigation strategies I'd crack up laughing and then dump her.

4k is a bit more substantial, but thats further down the line after she has started up and still not a sum worth worrying about.

I'm not trying to be all big man 'loadsamoney' here. It's really just a value almost anyone can afford to lose, especially to your girlfriend. At least it's not going on shoes :-)

[IR35FanClub]

Yeah but just coming up with rubbish to avoid paying tax doesn't help anyone. It isn't a forum for schemers to pass every scam past us that comes in to your head.

If the numbers made it worth it it might even be slightly credible... but £1K. You are willing to look for a scheme to involve your GF in your business for 1k???? Lend her the money yourself and keep your business out of it. It just isn't worth it.

Aaargh, some of your comments are insightful and helpful, and yet sometimes you treat the forum as if you are your sig picture. Isn't it my prerogative to ask any bowlox I like - like is AndyW's mum as good as I've heard? And yours to ignore anything you find tiresome irksome or repetitive? Otherwise you are in danger off putting of the newbie's who do ask repetitive questions, but for someone like me - I'll answer them - for now. Till I get bored, and then I'll stick The Joker as my sig and tell them to F Off! Don't forget some people just want to chat as if they were in the pub, and not be told they can't have a conversation about who will win the premiership because it has already been discussed.

Idea number 24... can I claim time spent on CUK is working time whilst working at my client site and invoice for it, it is sort of work related?. You must be doing that surely - judging by the number of your posts? Or are you based in Oz and you work whilst we are asleep ?

PS It's 5k. I can lend her 1k now for bits and pieces to be paid back by December 2013 then she'll get another 4k for stock in April 2013 to be paid back December 2014. I've actually got no money of my own to lend her, I just got divorced, bought a new house and furnished it. Thankfully the company has plenty of money in it should the fans go a muddy brown colour. That's whats driving this questioning, I'm not trying to avoid tax, but trying to get her the money in the best way possible FOR ME, and make my life more financially secure as her earnings could increase tenfold by working for herself. I did consider starting her up "within" my company or as a subsidiary, but it's too early for that. Although we've known each other socially for years, its still early days.

I've used my 20% tax limit for the year getting my mortgage deposit out, and dont really want to use my own directors loan to fund her business... just in case. I have first hand experience of dodgy girlfriends who seemed nice. One who used my credit card without my permission.

[Wanderer]

can i make her a director, not shareholder of my company, and get her to take the directors loan herself? As in its not then on my directors loan account, so should the worst happen and we split up, i can write the loan off without it affecting my tax affairs.

Sounds like a fair idea. I would be wary about making her a director though. Go back to your accountant and ask if you can just do it as a loan on normal commercial terms (albet it at a low interest rate).

Like you say, if it ever gets written off (heaven forbid) then it becomes taxable on her as income rather than you and it can written it off against corporation tax to mitigate some of the loss....

[northernladuk]

I'm as straight as they come when it comes to "schemes", the comments on other threads are just me chipping in ideas to see what is and isn't feasible. I'm much happier keeping everyone away from my money ;-)

The fact you have put forward a couple of 'schemes' with no intention than to otherwise avoid paying tax I would argue that.

However this is a legit question - I know how directors loans work having spend a while reading and re-reading them. I've just not come across anyone using them for a spouse turned director or GF. The questions are usually along the lines of "I want to take some money tax free from my company how do I d that?".

By making her a director just to avoid paying the tax is a 'scheme'. Apart from that it is just a normal loan process which as been asked many times.

This is me saying, I have some money in the company I want to lend the GF - has anyone else done this and what method did you use? I'd equally lend it to a mate or other family member if they presented me with a suitable business plan and were willing to pay me interest.

Keep your business and family separate. Period.

Surely the whole purpose is for people to come here discuss and then go to an accountant once we're a bit more clued up. If we limit the conversation to what has not been discussed before then the forum may as well close down.

Yeah but just coming up with rubbish to avoid paying tax doesn't help anyone. It isn't a forum for schemers to pass every scam past us that comes in to your head.

If the numbers made it worth it it might even be slightly credible... but £1K. You are willing to look for a scheme to involve your GF in your business for 1k???? Lend her the money yourself and keep your business out of it. It just isn't worth it.

[IR35FanClub]

Why don't you ask your accountant? If you are setting up rather dubious schemes to pass money around and avoid tax the very least you want is a) Someone WGAS and b) some professional advice.

There are plenty of threads on here explaining how loans from LTD's work. Try looking some of them up.

I'm as straight as they come when it comes to "schemes", the comments on other threads are just me chipping in ideas to see what is and isn't feasible. I'm much happier keeping everyone away from my money ;-)

However this is a legit question - I know how directors loans work having spend a while reading and re-reading them. I've just not come across anyone using them for a spouse turned director or GF. The questions are usually along the lines of "I want to take some money tax free from my company how do I d that?".

This is me saying, I have some money in the company I want to lend the GF - has anyone else done this and what method did you use? I'd equally lend it to a mate or other family member if they presented me with a suitable business plan and were willing to pay me interest.

Surely the whole purpose is for people to come here discuss and then go to an accountant once we're a bit more clued up. If we limit the conversation to what has not been discussed before then the forum may as well close down.

[northernladuk]

Why don't you ask your accountant? If you are setting up rather dubious schemes to pass money around and avoid tax the very least you want is a) Someone WGAS and b) some professional advice.

There are plenty of threads on here explaining how loans from LTD's work. Try looking some of them up.

[IR35FanClub]

I should add, this isn't silly money, its £1k now for a few incidentals and then £4k in the new tax year to maximise the time I get to repay it.

If it goes well, Ill expand the business with her, start selling stuff online she sells in the salon, and Ill help with the customers day to day. Maybe even take on staff and be the manager as she was reluctant to do that. Ladies. loads of them. Phwoaar. And she hasnt suspected my motives yet. Actually it becuase I've seen the profit margins if she can get 10 customers a week shell be earning more than me, if she gets to 20 shell be full time and I can give up day job and focus on this business.
Lomg slog ahead, but I think it will be worth it. Somehow i feel she'll be paying me to do her book keeping.

[IR35FanClub]

Im looking at capitalising a business for my other half. Were not married, yet, but living together.

I'm considering using some of my warchest as a loan to her and have discussed with my old accountant (who will be her new accountant). Her suggestion was for me to take a directors loan personally, and pass it to my o/h. She can pay me the 4% interest and i dont get a tax charge.

Thats nice, but I came up with another idea... can i make her a director, not shareholder of my company, and get her to take the directors loan herself? As in its not then on my directors loan account, so should the worst happen and we split up, i can write the loan off without it affecting my tax affairs.

One other option can I lend her the money from the company even if shes not a director?. in the understanding its done to her business? unfortunately though i fear that as she will be sole trader and not a ltd, i would need a consumer credit license to do this. probably.

Either way i know ill want a formal loan agreement, although i trust her now, i may need to show in future that it was her who had the money from the company and not me. (im divorced and nolonger romatically deluded when it comes to money).

ps i already know The rules about directors loans, just trying to see if anyone has lent money to a non spouse partner before and the way you did it.

Ii makes good business sense to me as ill get a 4% return (before CT) which is better then i get leaving it in my reserve account.