Tax relief when loaning to my limited company

michaels2411

He all,
I am a high rate tax payer, I also have a small limited company and I am the sole director. The question is, if I issue a loan to my own limited company do I get tax relief on my income when I do my yearly self assessment?


I heard somewhere that as long as you earn under 200k you can issue a loan and claim relief upto a 50k loan. I preume 20% relief of 50k?



Any clarification would be really useful.



Thanks.

csgohan4

No tax relief unless they charge interest on the loan, even then it would be counted as income


https://www.gov.uk/directors-loans/you-lend-your-company-money

michaels2411

Many thanks, sorry (forgive me) I may have been unclear.


So the actual question is if I take out a loan in my name, then use those funds to issue a directors loan to my limited company, do I then get "Qualifying Loan relief" upon the interest of the personal loan or additional advance used to fund my own limited company?

BoGoF

No, no relief on the capital loaned. If you pay interest on the amount you borrowed to lend the company you may be able to claim relief on that

https://www.gov.uk/government/publications/interest-and-alternative-finance-payments-eligible-for-relief-on-qualifying-loans-and-alternative-finance-arrangements-hs340-self-assessment-helpshee/hs340-interest-and-alternative-finance-payments-eligible-for-relief-on-qualifying-loans-and-alternative-finance-arrangements-2019

Sibbers123

You can claim tax relief in your personal tax return on the interest you have incurred on a loan you have taken out to provide funds to a close company. The close company must be a trading company (not an investment one) - there are other conditions, but I can't remember off the top of my head and I am reluctant to look things up fro Free!

https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim10210