A director has a personal mortgage and the bank have agreed to use funds on deposit within the company to offset against the personal mortgage.
Therefore the director pays no interest and the company receives no interest.
What are the tax implications of this ?
Has the director received a benefit?
Thanks for the help!
Andrew
Replies (2)
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Well ....
... he's definitely received a benefit and I would have thought that it was caught by the BIK legislation. Would be interested to hear what others think though.
Not sure
It could be argued that the cash in the company is simply money loaned to the company by the director and secured by a personal mortgage.
Interest drawn from the company is then relivable against interest paid under s360, and I would argue that in this case.
You'd need to get the structure right though.