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arjunsharma88

Inter company loans - Need advice from an Accountant

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Hello,

I have been working as a freelancer for the last 3~4 years and have saved some money in my LTD company (Company A)

Reading online I've seen(I could be completely wrong here)...

I can set up a LTD company -> Company B

 

Company A lends Company B

Company A -> Company B

 

And I write off the loan in Company A in a later date? How exactly does this work?

 

Thanks AJ

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It’s a non event for tax purposes although if company who wrote the debt off later gets into financial difficulty, you (as a director) could be challenged as to whether you’d acted in the companies best interest. There are anti avoidance (settlements and transactions in securities) that could come into play but this is unlikely unless an individual benefits. All that aside, you could make it a commercial arrangement which wouldn’t make any difference to the overall position.


Jerome
07943005902

 

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