rodger

[rodger]

hi
My business account has spare funds that i do not need to draw at present. My bank only gives 3.75% int. I have a buy to let property that gets accounted for in my tax return under property statement, I record the interest paid on the mortgage loan on this section which is currently 7.5%

I would like to borrow money from my company and pay the company 4% saving 3.5%.

Advice from accountant says i cannot do this, but phone call to tax man says yes i can.

Any input will be apreciated.

[Jack Hackett]

Originally Posted by rodger

hi
My business account has spare funds that i do not need to draw at present. My bank only gives 3.75% int. I have a buy to let property that gets accounted for in my tax return under property statement, I record the interest paid on the mortgage loan on this section which is currently 7.5%

I would like to borrow money from my company and pay the company 4% saving 3.5%.

Advice from accountant says i cannot do this, but phone call to tax man says yes i can.

Any input will be apreciated.

It may be wise to speak to another accountant and get a second opinion. I'm not saying they're wrong but if you choose to follow the tax man's advice and it turns out to be wrong I doubt you'll have any comeback as the IR always seems to be 'blameless'.

[Financialmarkets]

I agree with Jack Hackett that you should look for more advice from a professional. Did you going into detail when you were asking the tax man? They should know what they are talking about but if you did not give him the full spiel he may not have informed you correctly. Maybe you could also speak with your company to see if anyone there knows anymore about the topic.

[rodger]

Kieth,
Thankyou, i will contact the taxman for written verification eventually, i just thought that i might get a response that would convince me without the need to contact the taxman.
I know that there are rules for directors but i am not sure if this situation applies, because wife is involved in joint the borrowing as well.

Participators is a word that has been used in tax language.