Hi. Newbie here. Have looked through archives but can't see this coming up before - possibly because it's barmy, you tell me.
I have a one-man limited company, from which I currently take a £12k annual salary and c £36k dividends. I'd like to divert some of the dividends into pension contribution - but I need £48k/year to cover personal expenses.
Is it insane to borrow to cover personal expenses, to free up company income to invest in the pension? Tax benefits would be significant - obviously the cost of borrowing has to be set against that, but debt is pretty cheap at the moment - especially if I can find a way of putting it on the mortgage (we have a lot of equity in the house).
Has anybody looked at this? What am I missing?
I have a one-man limited company, from which I currently take a £12k annual salary and c £36k dividends. I'd like to divert some of the dividends into pension contribution - but I need £48k/year to cover personal expenses.
Is it insane to borrow to cover personal expenses, to free up company income to invest in the pension? Tax benefits would be significant - obviously the cost of borrowing has to be set against that, but debt is pretty cheap at the moment - especially if I can find a way of putting it on the mortgage (we have a lot of equity in the house).
Has anybody looked at this? What am I missing?
Comment