Loan Deed Ltd company

[itcontractor79]

Hi

I have reasonable funds in my limited company. I am planning to buy a second home and my accountant advised me that I can take a loan for mortgage from my limited company using Loan Deed (Incorporating Equitable Charge) and pay interest to the company every month at current market interest rate.

Can someone please help me understand the pros and cons of this?

Thanks

[northernladuk]

This is something The Puma touched on a long time ago isn't it? Nothing came of it from what I remember. Lemme have a quick search.

EDIT : Ugh, no he didn't. That was around trusts.
https://forums.contractoruk.com/acco...k-account.html

The fact I can't find any reference to it beyond a passing mention speaks volumes to me but there you go.

You could possibly try talking to John Yerou at Freelancer Financials. He must have seen something like this I would have thought.
https://www.freelancerfinancials.uk.com/

[itcontractor79]

Thanks. Searched the forum for Puma and could no find any. Can you please send me the link or the right terminology to search with.

[northernladuk]

Thanks. Searched the forum for Puma and could no find any. Can you please send me the link or the right terminology to search with.

Type the following in to Google <keywords> site:forums.contractoruk.com

Deed THEPUMA site:forums.contractoruk.com

But as I said above different beast.

[Jessica@WhiteFieldTax]

I think for "loan deed" read mortgage agreement.

To all intents and purposes it would be the same as any other loan from a company to a participator -

(a) interest benefit at official rate
(b) S455 at 32.5% one off charge, repayable when loan repaid

"deed" refers to the legal form of document, it doesn't change the substance.

Hope this helps.

[northernladuk]

And some, if not most mortgage providers won't accept loans as a deposit will they?

[Jessica@WhiteFieldTax]

I don't know, but you could see why.