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Directors loan or advance from two companies

Can companies under same control advance multiple directors loans?

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BACKGROUND: Husband & wife ltd co, 50/50 shareholding, both directors.

If the company advances a loan of £10k to the Husband (which is repaid in full before 9 months after the year-end) then there is no BIK charge or s455 tax payable.

QUESTION: Can Husband receive another £10k loan advanced from a second company which is also owned and controlled by the same Husband & Wife?

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By zebaa
19th Aug 2021 15:17

I'm going to say yes, just to keep things simple. But you do understand the consequences, don't you ?

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By David Ex
19th Aug 2021 15:27

zebaa wrote:

I'm going to say yes, just to keep things simple. But you do understand the consequences, don't you ?

Absolutely he does:

https://www.accountingweb.co.uk/any-answers/bik-limit-of-ps10k-on-direct...

https://www.accountingweb.co.uk/any-answers/directors-loan-account-overd...

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Stepurhan
By stepurhan
19th Aug 2021 15:24

Is this a specialism for you? Your last three questions have all been variants about £10k loans to director/shareholders from companies.

If they are genuinely separate companies, apart from the common ownership, why do you think it wouldn't be possible? I can think of one possible reason, but that would involve connections beyond common ownership. Care to expand on why you are worried it might not be possible?

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By I'msorryIhaven'taclue
19th Aug 2021 16:18

You have to admire the OP's tenacity, though.

I'm reminded of a client with similarly unshakeable aspirations who repeatedly petitioned your truly to receive interest on his DLA (which is permanently in the black, although only just so). And I would respond by explaining risk v. reward, and the negligible benefits involved. Matters would terminate whenever I issued an estimate of our costs; until a few months later, that is, whereupon we'd go through the entire cycle from scratch.

It turned out the client had paid £300 to an online tax-advice firm who rewarded him with a pamphlet crammed with what I suppose you might call tax dodges, and he was evidently determined to recoup his investment.

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By Tax Dragon
19th Aug 2021 16:28

clark.hall wrote:

QUESTION: Can Husband receive another £10k loan advanced from a second company which is also owned and controlled by the same Husband & Wife?

I don't know. Does the second company have £10k available to lend? Is Wife willing to let this incessant borrower of a husband have yet another loan?

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By Matrix
19th Aug 2021 16:38

I wouldn’t make any assumptions after the other thread. Well I won’t anyway.

With all this back and forth don’t your fees now exceed the small BIK?

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By clark.hall
19th Aug 2021 16:41

Ok, ok you're a nosey lot (I wondered if x3 posts would be spotted) :-D

I suppose it is a bit of a speciality at the moment (lets face it there are more clients with more excess cash now that pre-COVID).

I don't particularly have any suspicion why it wouldn't be allowed - just running it past the experts! Thanks for your help.

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By Paul Crowley
19th Aug 2021 17:53

Bounce back loans are not internded to be handed over tax free to the shareholders

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