Annual accounts question

pali2021

I setup a limited company last year with the intention of buying property and then letting it. Once the company was formed, I loaned money from my IT limited company to this buy to let company. But due to various reasons including lockdowns, covid etc... I was not able to buy a property. Considering my situation I am not sure if I should be filing dormat accounts (as I have not traded) or having taken loan from IT limited company will this be considered a significant accounting transaction and as a result file normal accounts? My accountant on IT limited company has no knowledge of buy to let companies and hence asking here if anyone has any views on this. Thanks in advance.

martindow

This seems a very general question so I don't understand  why your accountant can't tell you the answer.  He may specialise in IT companies, so does he not know what to do if it had been one of these companies that had received a loan but not traded?

Pennywise

The loan is a director's loan from the IT company which may cause there to be income tax due on benefits in kind (if interest unpaid), and maybe the 32.5% tax charge on the company until the loan is repaid.

As for the property company, yes, receipt of the loan means you can't claim it's dormant, as there will be interest due to be paid to the IT company.

pali2021

Thank you for the clarification, much appreciated.