Loan to buy interest in close company
I have a client who is a 40% shareholder and director in a recently formed company which is trading in the field of buying residential properties, refurbishing and then selling them on.
This director has a substantial open credit facility with a well known Building Society jointly with his wife and secured against their principal residence. Despite his ability to make a valid claim for non-miras interest against his personal Schedule Income (arising from an associated company in which he is a 45% shareholder) on the loans drawn down and injected to assist in buying property, he wants the trading company to pay the interest and claim relief for corporation tax purposes.
Given ICTA 1988 s 368(2) does the latter automatically preclude the company accepting the responsibility for paying the interest and claiming relief - there is no intention of making a double claim.
Any thoughts urgently please.
- How much of your work is admin? 608 5
- TaxCalc Accounts production 85 1
- HMRC BACK AND FORTH FIGHT ON BTL PROPERTY ALLOWANCES 38 1
- Nominal Ledger 377 11
- Gave wrong info to client about tax due 545 20
- Running two businesses from the same premises 383 4
- Fines for filing 12 months of FPS on one submission 191 2
- Base value unavailable re. Capital Gain 179 2
- Old CGT loss 196 3
- Gov.UK = NOT OK! 153 3
- Paper tax return 143 4
- Start up allowance? 367 12
- Will I need to resign? 157 1
- Invest in ''buy to let'' property 1,350 41
- Penalty for late PAYE registration? 243 3
- AIA or IFA 448 7
- Surely not? 452 10
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- Working out private usage for a Taxi Driver? 357 7
- Late Registration for VAT 359 11