Can directors hold money in trust for company ?
I have a client ltd. company with some £200k in the bank. They don't want to take it out as divs for higher rate tax reasons and don't have much scope with the dirs' loan a/cs, but would dearly love to be able to earn a slightly less paltry amount of interest than is being offered by their bank (amongst others) to ltd. cos.
I was therefore wondering whether they could invest the money personally at considerably better interest rates, holding it in trust for the company (this would be duly minuted). Any problems with this idea ?
Alternative suggestion would be to bring the money back into the co. for a few days round the year end and thus correct the dirs' loans. The Revenue used to be ok with this provided the loan a/cs were on the right side at the year end and weren't bothered what happened during the year, but not sure if they still are.
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