client wants to have his ltd company loan his mother money each month to cover her care fees, with the loan repaid on death as part of the estate
is this possible?
are there any potential issues for the client and or his mother in doing this?
Replies (4)
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None whatsoever, it is a fantastic way to benefit from HMRC tax breaks.
For every £100 the company lends to the mother HMRC also pays her £32.50 plus interest.
(Think I got that right, yeah, sure, I know it changed from £25 in the £100 to £32.50, yes, certainly on top of my game here, I know tax operates when there is a loan from company to participator or someone like their dear mother)
As you are an accountant I can ignore my usual advice of urging you to seek the advice of an accountant, though you could give yourself the advice if you were mindful.
You could even pretend to lend the mother more than you actually do and pocket the difference tax free, everyone's a winner!