Directors Loan

C

charliehorse

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Hi All
Hope I am asking this at the right place..
I had to remortgage due to separation in 2004. Its a variable mortgage with PTSB on which I pay 6.85% as its on a commercial building. I live in an apartment upstairs. There is c.€60k left on the mortgage. I took a directors loan from my company of €10k so that has been used up. My business has over €50k sitting on deposit earning close to nothing.
Does anyone know if it would be legal for my company to lend this money to me on a business deal at say 3%?
I tried all the banks for a better deal but they will not touch "mixed use" so I am basically stuck being gouged by PTSB. My business has been going 27 years and is sound.
 
BIK on the deemed interest, income tax via the CT1 on the loan to a participator and company law 10% of assets rules are all hurdles for you to overcome.
 
Thanks for your speedy reply Gordon.
More complicated than I thought.
If I were to get a loan from a friend at a lower rate, would that simplify things or would the deemed BIK still be a factor?
Charlie
 
charliehorse said:
Thanks for your speedy reply Gordon.
More complicated than I thought.
If I were to get a loan from a friend at a lower rate, would that simplify things or would the deemed BIK still be a factor?
Charlie
Click to expand...

Ignoring the inherent danger of loans between family and friends, there would be no BIK. There would be a deemed gift in respect of the free use of the money, but it would be covered by the €3k per annum small gift exemption.
 
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