i am a company director which has about 100k in its current account. i want to get a loan of 30k for about 1 year from it , is this possible or do i have to pay benefit in kind on this. i dont want to treat the 30k as a directors salary as already have salary gone over higher tax bracket.
getting loan out of my company
- Thread starter oaky9
- Start date
Thre are several issues here and for proper appropriate advice I would strongly ask that you contact the company's accountant/auditor who will be able to explain them fully to you.
In brief however they concern two areas , Company Law and Revenue Law. Under Company Law you cannot take a loan of more than 10% of the net assets of the company in a loan or it is an illegal loan. The net assets will be available from the companys accounts. Under Revenue Law even where the loan is "legal" under Company Law, there are procedures regarding the Company paying a tax charge, which is then repaid to the company if the loan is repaid by the director.
As I said in the beginning, you need to speak with the company's accountant/auditor before doing this. You could easily fall foul of several serious pieces of legislation by not doing so.
In brief however they concern two areas , Company Law and Revenue Law. Under Company Law you cannot take a loan of more than 10% of the net assets of the company in a loan or it is an illegal loan. The net assets will be available from the companys accounts. Under Revenue Law even where the loan is "legal" under Company Law, there are procedures regarding the Company paying a tax charge, which is then repaid to the company if the loan is repaid by the director.
As I said in the beginning, you need to speak with the company's accountant/auditor before doing this. You could easily fall foul of several serious pieces of legislation by not doing so.
millertime
Registered User
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Looks like you could already be contravening Company Law. Talk to your accountant/auditor
How? The OP hasn't done anything yet, at least they asked before doing anything. Many times people do things like this and then when they're up to their eyes in it they look to their accountant/auditor to get them out of it, instead of a simple enquiry beforehand.
Loan withdrawal is not possible. As regards your higher rate salary I find that a lot of directors do not claim all of the expenses which they are entitled to. Items they do not claim include milage in private motor car on company business. Also if partner is a director he/she is also entitled to milage. Day trips and overnight stays also not correctly claimed. Also usage of home phone, mobile phones, home ESB (watch CGT rules). All of these are legitimate claims. No dodge.
Brendan Burgess
Founder
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Oaky
How did the €100k get there in the first place? If it's likely to be there permanently, then maybe you should bit the bullet and pay it to yourself as salary. This may reduce any Corporation Tax liability.
If the company needs the money long term, then borrow personally and leave the money in the company.
Brendan
How did the €100k get there in the first place? If it's likely to be there permanently, then maybe you should bit the bullet and pay it to yourself as salary. This may reduce any Corporation Tax liability.
If the company needs the money long term, then borrow personally and leave the money in the company.
Brendan