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Owners Loan To Limited Company

Owners Loan To Limited Company

I have come across a scenario and would welcome views.

A husband and wife own a limited company.
The company borrows money from the owners, through a formal loan agreement, with an interest rate of circa 18%.

It is not my area of expertise but I would have thought that HRMC would have a view on such a high interest rate? I am not seeking to give advice - I am just interested.

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By Ruddles
04th Mar 2016 19:23

I'm sure they would have a view.
What is yours?

Mine is that it's a darn sight cheaper than a Wonga loan.

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By qhas
05th Mar 2016 13:29

Interest rates

Ruddles wrote:
What is yours?

Mine is that it's a darn sight cheaper than a Wonga loan.


Has HMRC ever 'expressed a view' on Wonga's rates? Could be wrong but I suspect not.
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By Matrix
04th Mar 2016 20:03

You should advise them to obtain comparable interest rates, so approach lenders.

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04th Mar 2016 20:27

Loan

I think it is OK if you compare it to unsecured rates.

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05th Mar 2016 13:54

Significant

I doubt if it's a problem.

What's the tax at stake ? A few hundred ?  

If it's thousands or millions I might think again.

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