Ltd Co; repay loan from wife or increase husband's wage to up income? (tax question)

M

moneygrower

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We loaned my husband's company some money to set up a business which is doing well.

I work in the public service and I'm now planning to take some unpaid leave to mind our son.

Would it make better sense tax wise to get extra income by repaying ourselves the loan or increasing his wages?

He is self employed in a ltd company.

We were thinking we would still be better off to repay the loan to avoid income tax, are we right in this?
(will be asking the accountant too, just want to pick some brains).
 
Re: repay Co. loan or increase wage to up income

Absolutely repayment of the loan is the best route here. Otherwise you will be hit with top rate income tax plus PRSI. Loan repyament much more efficient as it means for the samenet income for your husband, the company spends about 45% less money
 
Re: repay Co. loan or increase wage to up income

amgd28 said:
Absolutely repayment of the loan is the best route here. Otherwise you will be hit with top rate income tax plus PRSI. Loan repyament much more efficient as it means for the samenet income for your husband, the company spends about 45% less money
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Can't disagree with this but best for the OP to check with their accountant first in case there is some specific reason why full repayment of directors loan might not be a good idea, for example if the loan has been partly offset to date by personal items paid for by the company, that might create an "overdrawn directors a/c" or "loan to directors" in the event of the loan being repaid. The last thing any company wants is hassle with the ODCE over "loans to directors"
 
Re: repay Co. loan or increase wage to up income

Good point. The principle is right but moneygrower, you need to check the detail with your accountant
 
Re: repay Co. loan or increase wage to up income

thanks just wondered if we'd missed anything. there's nothing being offset against the loan so it's straight forward.
 
Re: Ltd Co; repay loan from wife or increase husband's wage to up income? (tax questi

Hughie Lama said:
Loan to Wife for her Fraud Case Repayment?My soon to be ex-wife defrauded her previous employer, and when they found out, they started legal proceedings against her. When she told me about this, she requested a loan from me of around $4500. I lent her the money and she promised to pay this back by Feb. She hasn't till now. I asked her many times when this will be sorted out and she kept saying "soon".Now she tells me that I must take legal action to get this payed back as she won't repay this.We were married with an ANC contract. She is currently unemployed and we are going thru a divorce. Can I get this money back from her legally? And How?
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As you mentioned $ amounts in your post I assume you are in US/Can/Aus ?( sorry if I am wrong on this ). AAM is an Irish site and you may not necessarily get advice appropriate to the laws in your jurisdiction.
 
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