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Director loan to the ltd company

Is loan interest to a connected party tax deductible

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Director has made a loan to the ltd company two years ago of approx £250,000. This loan is for the fixed assets purchased and working capital. As per the loan agreement, the interest is charged at 2% above Bank of England interest rates. So far the interest is accrued in the company's accounts i.e. no cash payment has been made to the director. The company has not made a profit so far and therefore has not been able to pay. Is the interest charge tax-deductible even if no cash payment has been made. 

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By Duggimon
24th Aug 2021 10:31

Bear in mind the requirement for form CT61 and the deduction of income tax once it is paid.

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By zebaa
24th Aug 2021 13:00

The OP might want to think what the meaning of 'paid' is too.

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By Leywood
24th Aug 2021 14:04

Which has been covered on here until it’s almost boring.

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