Tax on interest on director loan credit

Tax on interest on director loan credit

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A director of a limited company client of mine has made a loan to their company as start up funding. They intend to charge the company interest on the loan. At the rate they wish to charge, the annual interest will be more than the Personal Savings Allowance.

The director has asked me if the interest is just rolled up in the loan in the company and not actually paid out to the diretor is it still taxable on the director?

My gut feeling is yes it is and so the interest charged, whether paid out or not, should be no more than the Personal Savings Allowance.

Thanks all

Replies (3)

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By mrme89
09th Jan 2019 15:36

Yes it is.

You'll also have to think about a CT61.

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By johngroganjga
09th Jan 2019 17:33

petestar1969 wrote:

... the interest charged, whether paid out or not, should be no more than the Personal Savings Allowance.

Why so?

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Replying to johngroganjga:
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By petestar1969
04th Apr 2019 13:59

johngroganjga wrote:

petestar1969 wrote:

... the interest charged, whether paid out or not, should be no more than the Personal Savings Allowance.

Why so?

So its not taxed

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