Directors loan or advance from two companies

Can companies under same control advance multiple directors loans?

Didn't find your answer?

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?

Replies (8)

Please login or register to join the discussion.

avatar
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 ?

Thanks (0)
Replying to zebaa:
avatar
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...

Thanks (0)
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?

Thanks (0)
Replying to stepurhan:
Avatar
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.

Thanks (0)
avatar
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?

Thanks (0)
avatar
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?

Thanks (0)
me.jpg
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.

Thanks (0)
Replying to clark.hall:
avatar
By Paul Crowley
19th Aug 2021 17:53

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

Thanks (0)