Loan to company

B

basic

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Hello,

I need a help for recording loan €9000 (for example)from private person to company in my books. That guy has taken loan himself from the bank and repayment would be €250 and interest €70 (that's what he pays). I would record loan to loan account and interest to bank charges and interest. Would it be correct? Thanks for any advice.
 
basic said:
Hello,

I need a help for recording loan €9000 (for example)from private person to company in my books. That guy has taken loan himself from the bank and repayment would be €250 and interest €70 (that's what he pays). I would record loan to loan account and interest to bank charges and interest. Would it be correct? Thanks for any advice.
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You have a loan from a person, what he has to pay to the bank is his business not yours.
Recording the details as you state seems fine.
The person will have to pay tax on the interest the company pays him.
 
Even if that interest is not income for that person? He just repays what he was charged by the bank. If it has to be treated as income then it is not fair for that person.
 
He declares the interest he receives from the company and claims as an allowable expense, the interest he pays to the bank. So if there is no profit or loss, then he pays no tax.

Brendan
 
Brendan said:
He declares the interest he receives from the company and claims as an allowable expense, the interest he pays to the bank. So if there is no profit or loss, then he pays no tax.

Brendan
Click to expand...
Are you sure, I can think of ways you can abuse that.
Guy gets personal loan, loans money to company, then he can write the interest he gets paid from the company off against the repayments on the personal loan.
 
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