Bank intrest?

[oowee]

19 minutes ago, button said:

Ok, so your business is making a loss, how does it pay you back? How does it pay dividends as these can’t be declared if it’s not making profit? 

The following year after making a loss it returns to profit to pay debt. This might simply be deferring income from year one to year two. In year two profit is reduced as debts are re paid again reducing tax on the company. The problem comes when the company owner wants a loan against assets with no income but even with this there are ways around, particularly with private banking. 

 

[button]

3 minutes ago, oowee said:

The following year after making a loss it returns to profit to pay debt. This might simply be deferring income from year one to year two. In year two profit is reduced as debts are re paid again reducing tax on the company. The problem comes when the company owner wants a loan against assets with no income but even with this there are ways around, particularly with private banking. 

 

So you are now making a profit and getting your money back, are you charging interest on said loan?

[Lloyd90]

41 minutes ago, button said:

So you are now making a profit and getting your money back, are you charging interest on said loan?

Yes, director “loans” are allowed to charge interest. 
 

https://www.pricebailey.co.uk/blog/directors-loan-interest-reduce-tax-bill/

 

As are “loans” from one company to another, with one company based in an off shore tax haven which pays no / tiny amounts of tax, whilst the company “based in the UK” makes a loss. 

[button]

56 minutes ago, Lloyd90 said:

Yes, director “loans” are allowed to charge interest. 
 

https://www.pricebailey.co.uk/blog/directors-loan-interest-reduce-tax-bill/

 

As are “loans” from one company to another, with one company based in an off shore tax haven which pays no / tiny amounts of tax, whilst the company “based in the UK” makes a loss. 

Glad you confirmed that so that interest now becomes taxable, so where is the dodge? You lent money, which you paid tax on to start with, which you are repaid with interest, which you are now taxed on? Company based in off shore tax haven? Seriously it’s a possibility, do you know many doing it? I have been in the game for 30 years and I have rarely come across structures like this, I really would not believe everything you read and hear as the ones doing the telling tend to have very creative minds and tend to be experts in most subjects, or so they think

[Lloyd90]

48 minutes ago, button said:

Glad you confirmed that so that interest now becomes taxable, so where is the dodge? You lent money, which you paid tax on to start with, which you are repaid with interest, which you are now taxed on? Company based in off shore tax haven? Seriously it’s a possibility, do you know many doing it? I have been in the game for 30 years and I have rarely come across structures like this, I really would not believe everything you read and hear as the ones doing the telling tend to have very creative minds and tend to be experts in most subjects, or so they think

We’re not talking about small companies with a handful of employees. 
 

That’s who should be able to give and charge interest on director loans. Who they’re aimed at. 
 

I’m talking about the types of people named in the Panama papers. 
 

Or this: 

https://amp.theguardian.com/uk-news/2023/jan/30/offshore-companies-with-uk-property-not-stating-beneficial-owners

 

Its exactly those types of people who’ve got inheritance tax added to farms… because they were using it not as intended to fiddle massive amounts of land / income out from inheritance tax. 
 

The everyday man who inherits a house from a deceased relative may end up paying it, but a millionaire who buys up a sporting estate is exempt. 
 

 

What game have you been in for 30 years? 

[Nublue 22]

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