I have two seperate clients who are husband & wife. The husband has a successful business and the wife set up her own business. The husband loaned the wife around 10K to get her business going.
The wifes business didn't work out so she sold it at a big loss and was only able to back back c1K.
Can the loan be written off in the accounts as tax deductable?
The husband has stated that he did use the wife business premises for office use (she rented the building) so has asked can she raise him an invoice to cover the amount of o/s loan as a rent invoice?
Any advice appreciated.
Thanks
CJS
Replies (2)
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Shutting the stable door after the horse has bolted??
Writing off the loan - The loan was not made for the purposes of the husband's business so writing it off would not be tax-deductible.
Invoice for rent - Are you not attempting to rewrite history? If the wife's sold the business then how can she now raise an invoice from it?
Yes, with the benefit of hindsight, the wife's business should have charged the husband's rent and perhaps there were some other expenses that should have gone through the husband's business rather than the wife's. It seems to me, however, that it's a bit late in the day to consider this now.