Thanks guys for your help. We are eligible for some relocation expense claims so working through that and our loan may be less than initially thought which is a bonus. Cannot buy a new sofa through this though which is not such a bonus hah (don't worry, only jokingly upset).
Thanks also for not being too brutal at my first thread. Having spent a few days hoking round the forums, I have picked up a lot of tips and noticed a lot of things we're not doing completely as we should be. This place is a really useful tool and I will be back
Shakeholder sounds soooo much better btw!
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Reply to: Taking a loan from our Ltd company
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Previously on "Taking a loan from our Ltd company"
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Originally posted by ASB View PostMartin,
I assume that doesn't remove the responsibility to pay the advance corporation tax on the loan if it remains outstanding for 9 months after the year end?
I appreciate that the intent of the OP was to repay over 5-6 months so this situation should not arise - unless the OP fails to meet the repayment schedule. Potentially this could cause difficulties and perhaps declaration of dividend at the appropriate point to repay the loan may be more cost effective.
Of course if the loan falls outwith the requirements to account for CT on it because a fair rate of interest is paid then this (potential) issue doesn't arise.
Alternatively would it be possible to make the loan to the other person (assuming they are a non participator) as it is under £15k; though I imagine their are other difficulties with this. HMRC probably wanting to treat it as a loan to the director any way or needing a relevant licence under the cca to lend anyway.
Loans to non-participators could provide a number of issues. As you mentioned, there is the likelihood of the need for a consumer credit license & HMRC could possibly treat the loan as being the director's if the person in receipt of the loan was connected. I have no doubt that HMRC would question the commercial purpose of the loan assuming if lending is not part of the company's trade.
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Originally posted by Noni View Postyou have to declare on P11d the loan which you are taking from your own company. Its a benefit. HMRC is always very keen in picking up Loans and related party transaction.
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Originally posted by Martin at NixonWilliams View PostIf you do not want the loan to affect your dividends or tax owed you will need to pay interest to the company.
Based on a loan of £13,000 for 6 months you would need to pay £260 (£13,000 x 4% x 6/12).
I hope this helps.
I assume that doesn't remove the responsibility to pay the advance corporation tax on the loan if it remains outstanding for 9 months after the year end?
I appreciate that the intent of the OP was to repay over 5-6 months so this situation should not arise - unless the OP fails to meet the repayment schedule. Potentially this could cause difficulties and perhaps declaration of dividend at the appropriate point to repay the loan may be more cost effective.
Of course if the loan falls outwith the requirements to account for CT on it because a fair rate of interest is paid then this (potential) issue doesn't arise.
Alternatively would it be possible to make the loan to the other person (assuming they are a non participator) as it is under £15k; though I imagine their are other difficulties with this. HMRC probably wanting to treat it as a loan to the director any way or needing a relevant licence under the cca to lend anyway.
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Originally posted by TheFaQQer View PostHTHBIDI
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Originally posted by jenhanr View PostMight go the route of paying interest just to avoid going over the threshold and making things messy.Originally posted by northernladuk View PostIt's just that you said you might pay the tax like there was another option.Originally posted by Contreras View PostUh, no she didn't.
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Are you a director?
you have to declare on P11d the loan which you are taking from your own company. Its a benefit. HMRC is always very keen in picking up Loans and related party transaction.
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Originally posted by jenhanr View PostIf there are two shakeholders, myself and husband, should we have documented the conversation we had over dinner?
Strictly speaking it's a legal requirement to have it minuted but there would only be a problem if one of the shareholders complained. Just write up the minutes of the meeting as "The shareholders unanimously agreed to advance a directors loan of £13,000 to (Director's name) and that the loan would be repayable on dd/mm/yyyy".
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Originally posted by Contreras View PostUh, no she didn't.
but corrected by NW anyway..
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Originally posted by jenhanr View PostWow yes thanks for all the help.
Might go the route of paying interest just to avoid going over the threshold and making things messy.
If there are two shakeholders, myself and husband, should we have documented the conversation we had over dinner?
And !
Originally posted by northernladuk View PostIt's just that you said you might pay the tax like there was another option.
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Originally posted by northernladuk View PostAnd what is your other option pray tell? Just take it out and put it back hoping no one will notice?
In the rare circumstance that the P11d option is cheaper, most opt to pay the interest instead anyway as it removes the need to declare the loan on the P11d and doesn't complicate the calculation for determining how much of your basic rate threshold remains etc.
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Originally posted by jenhanr View PostUhhh no.
If I knew exactly what I was doing, I wouldn't have to ask here. Thanks for the help.
If you discussed it over dinner then claim it as a business expense
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Originally posted by jenhanr View Post
Might go the route of paying interest just to avoid going over the threshold and making things messy.
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