Info needed on Loan between two shareholders

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT member discussion
Hi there

I have a client who is about to buy 4% shareholding in a company in which he has a 1% holding.

To facilitate the purchase he is going to loan the necessary cash( interest free) from one of the other shareholders who is also a director in the company.

Does anybody know of any tax problems in doing this?
Not my area of expertise, so over to you.

Thanks

:(

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Info needed on Loan between two shareholders

    Hi Chopkins.

    A low interest loan is a taxable benefit. He would be taxed on the difference between the official rate (currently 5% i believe) and the rate he is paying, i.e. 0%

    Scott.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Info needed on Loan between two shareholders

    Hi Scotty

    Thanks for the info. If the loan is a personal loan from the Directors personal account would this still apply.

    Chris

Categories

Privacy Policy