I have a Close Company with 3 Directors and equal shareholders. They all have lent money to the Company but not in equal amounts.
To be equitable I intend to charge interest on those loans at a commercial rate (say Base +5% to reflect the business risk.)
Question is the loan interest taxable and Tax has to be paid over, if charged against profit but only credited to the loan accounts and not paid to the Director?
Or is it treated as having no tax consequence until it is paid to the Director?
Any Guidance gratefully received!!!
Brendan Morrissey