Student Finance and limited company

tasticz

Hi guys,

I had a few question about Student Finance repayment and limited company.

I work full time and my student repayment is taken automatically before I get paid as my salary is over £25k.

I have a Plan B student loan (undergrad after 2012) and also the Post graduate loan.

My parents have a limited company with just over £120k in the company account. They want to transfer the company shares to my name (i.e. make me the sole director of the company).

If we go ahead with this, does this mean I will need to pay student finance 9% and 6% of the share value.

I am not planning to use the money in the company account, it will just be there in the company account?

Thanks

Pennywise

tasticz wrote: »

Hi guys,

I had a few question about Student Finance repayment and limited company.

I work full time and my student repayment is taken automatically before I get paid as my salary is over £25k.

I have a Plan B student loan (undergrad after 2012) and also the Post graduate loan.

My parents have a limited company with just over £120k in the company account. They want to transfer the company shares to my name (i.e. make me the sole director of the company).

If we go ahead with this, does this mean I will need to pay student finance 9% and 6% of the share value.

I am not planning to use the money in the company account, it will just be there in the company account?

Thanks

No, student loan repayments are based on income.

uknick

Do you mean sole director or shareholder? Completely different things.

Also, have your parents considered the capital gains tax implications?

F1F93

uknick wrote: »

Do you mean sole director or shareholder? Completely different things.

This. Shareholders own the company. They earn money due to dividends that the company pays or capital growth from the company (and thus the shares) increasing in value.

Directors are elected to run the company on behalf of the shareholders. Their income is usually in the form of a salary.

Your parents transferring shares into your name makes you a shareholder, not a director. Of course you can be both, but they are two distinct things. If your parents transfer shares to you there will be capital gains implications, however there are reliefs available to help mitigate this.

To answer your original question, no it won't. If you take any sort of income from the company (in the form of a salary, interest on any loans you make to the company or dividends declared by the company) this will count as income for student loans purposes but the transfer of shares itself will not count.