Wife - taking director's loan

[kembljoe]

Hi,

I would like to take director's loan under my wife's name. She is a secretary and a shareholder in my company but not a director.

Is it still possible to take the director's loan even though she is not a director in my company?

Regards.

[eek]

Hi,

I would like to take director's loan under my wife's name. She is a secretary and a shareholder in my company but not a director.

Is it still possible to take the director's loan even though she is not a director in my company?

Regards.

No. Short and sweet but a director's loan requires being a director.

[northernladuk]

No. Short and sweet but a director's loan requires being a director.

I think we need a new catagory in the CUK awards for questions like this.

[ASB]

I wonder what your motivation for that may be. 2 x 5k perhaps?

Of course you have a variety of ways forward.

make her a director.

Borrow the money youself.

lend her the money anyway.

all these will have different taxation consequences of course.

[Scruff]

Is this someone's new blithering sockie?

If not, go to "Begin" and engage an Accountant

[Clare@InTouch]

You could just take a loan yourself and pay interest at 4%. That would avoid any tax implications or indeed any faffing around trying to find a way around the legislation (assuming you're trying to do the 2x£5k as mentioned above!).

[Martin at NixonWilliams]

As ASB points out, I assume it is your intention to use two lots of the £5,000 limit available before having to pay interest or declare the benefit in kind? (this is changing to £10,000 from April). If so you can loan the money to your wife without her being a director.

Be aware of the implications this might have on your company's ability to pay its taxes on time and the additional taxes that may be due as a result of the loan(s).

Our advice is always to avoid directors loans where possible. If you are certain the loan can be repaid by a suitable date then it can be fine but in my experience this often proves to be difficult which can lead to a number of other issues later down the line.

Martin

[Maslins]

Our advice is always to avoid directors loans where possible. If you are certain the loan can be repaid by a suitable date then it can be fine but in my experience this often proves to be difficult which can lead to a number of other issues later down the line.

This. For every person who manages to do well by cleverly playing round the rules, there's a dozen others who cock it up, forgetting to repay in time, or inadvertently breach some other threshold and end up getting in a mess.

Far too many people worry about the clever stuff when they should concentrate on the basics.

[kembljoe]

I think we need a new catagory in the CUK awards for questions like this.

From HMRC website:

HM Revenue & Customs: Directors' loan accounts and Corporation Tax explained

What is a participator in a close company

HMRC defines a participator as a person who has a share or 'interest' in a company. A participator is usually a shareholder who could also be a director. A participator includes any 'associate' - for example, spouse or civil partner, business partner, relative, trustee, or a loan creditor. A participator's interest in a company can be in its capital (for example shares) and/or in the income of the company.

HMRC defines a 'close company' for Corporation Tax purposes as a company that is controlled directly or indirectly by 5 or fewer participators - or any number of participators if they are all directors.

Please note that these are not necessarily the same definitions used by other HMRC tax areas (for example VAT), other government agencies (for example Companies House), or various accounting conventions used to prepare audited accounts.

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You guys just know how to monkey around, nothing else. Sorry. You have no seriousness or knowledge about managing the company.

As HMRC says, there is no need to make her director. Simple, isn't it? I think you should join this new "category" (not catagory, learn english first) of CUK awards and I am sure you will lose there as well due to your silly answers.

Thanks Nixon Williams for the correct answer.

[Clare@InTouch]

From HMRC website:

HM Revenue & Customs: Directors' loan accounts and Corporation Tax explained

What is a participator in a close company

HMRC defines a participator as a person who has a share or 'interest' in a company. A participator is usually a shareholder who could also be a director. A participator includes any 'associate' - for example, spouse or civil partner, business partner, relative, trustee, or a loan creditor. A participator's interest in a company can be in its capital (for example shares) and/or in the income of the company.

HMRC defines a 'close company' for Corporation Tax purposes as a company that is controlled directly or indirectly by 5 or fewer participators - or any number of participators if they are all directors.

Please note that these are not necessarily the same definitions used by other HMRC tax areas (for example VAT), other government agencies (for example Companies House), or various accounting conventions used to prepare audited accounts.

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You guys just know how to monkey around, nothing else. Sorry. You have no seriousness or knowledge about managing the company.

As HMRC says, there is no need to make her director. Simple, isn't it? I think you should join CUK awards and I am sure you will lose there as well due to your silly answers.

Thanks Nixon Williams for the correct answer.

The answer to whether you can give a director's loan to your wife is still a no, as she isn't a director.

That doesn't mean you cannot loan her money in another capacity. The devil is in the detail