Anonymous
Share this content
8

Buy asset in ltd company by loaning to company

Didn't find your answer?

I have £50k in my Ltd company after excluding liabilities. I wish to purchase an asset worth £75k in the company's name. 
Can I pay £75k from my private account into the company account and show it as a loan to the company going forward or would I have to utilise the £50k in the company's account and only be limited to a maximum loan of £25k.

Any advice would be greatly appreciated. Thank you.

 

Replies (8)

Please login or register to join the discussion.

blue sheep
By NH
17th Jan 2021 11:13

Yes you can, why anonymous?

Thanks (0)
avatar
By Ashaque
17th Jan 2021 11:17

In error as first posting! Can’t seem to reverse it for this now.

I presume I can loan £75k without any issues from my private account.

Thank you.

ASH
Kent

Thanks (0)
Replying to Ashaque:
avatar
By Paul Crowley
17th Jan 2021 11:53

The site warns you about Anon

Anon must be chosen by you, it is not the default

A simple question like the one posed suggests you do not have an accountant
If this is DIY I worry whether the postings will operate correctly

Thanks (0)
Replying to Ashaque:
Hallerud at Easter
By DJKL
17th Jan 2021 12:56

The only issue, pretty unlikely, is at some point HMRC asking about the source of the funds you have lent the company, but they would really need to have other concerns about your/the company's affairs for the question to arise. Effectively lending money to companies is usually not an issue, though if you wish to charge it interest there are certain protocols, it is borrowing money from companies that tends more to be the problem.

The only caveat is if the asset to be bought by the company is say some form of investment property/investment that could impact your personal tax position were you later to want to wind up the company, so a chat with an accountant would likely be clever before you do anything.

Thanks (0)
Routemaster image
By tom123
17th Jan 2021 12:46

What is the asset?

Thanks (0)
avatar
By Ashaque
17th Jan 2021 13:11

Very helpful replies. Thank you all.

I went into edit first time round before posting and didn’t realise that the system had chosen or maybe l inadvertently clicked on “anonymous”.

BW
ASH

Thanks (0)
Replying to Ashaque:
avatar
By Youareatit
17th Jan 2021 13:19

The system cannot choose 'anon' posting.

When you click on it you get a warning, so that avoids inadvertent clicking.

Beside ''AccountingWEB.co.uk is the largest independent online community for accounting and finance professionals'', so looks like you were having an whole inadvertent day ;-)

Have you asked this question of your Accountant? That is the best place to start as they provide advice based on specific circumstances with the benefit of the full facts rather than only one or two as posted. If you do not have an Accountant, it is really worth your while to get one.

Thanks (1)
avatar
By Montrose
17th Jan 2021 18:20

A possible downside could be if the shares in the company were transferred at a later date to a trust. Subsequent repayment of the loan could give rise to an income tax charge in your hands [See ITTOIA s633].

Thanks (0)
Share this content