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Post Info TOPIC: Is interest on a loan allowable?
BannanaMan


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Is interest on a loan allowable?
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Hi

Just what I didn't want on a Friday morning. I've just been stumped by a clients question. They bought into a limited company and they had to take out a personal loan to fund the purchase of the shares. I'm just completing their personal tax return and they have asked if they can claim tax relief on the loan interest.

I'm not sure - can anyone help please?

Ben

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Bannana Man

A.K.A. Ben the mild-mannered Book Keeper
john Boy


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yes this counts as a qualifying loan. Provided the company counts as a close company, ie it si controlled by 5 or less individuals.

http://www.hmrc.gov.uk/helpsheets/hs340.pdf



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BannanaMan


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Thats great, thanks for your quick reply.

Yep looks like its allowable as its a close company, just 2 directors and shareholders.

Cheers John Boy!



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Bannana Man

A.K.A. Ben the mild-mannered Book Keeper
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