News & Insights
New tax free limit for company loans
Since 6 April 2014 directors can borrow up to £10000 ( previously £5000 ) from their company without a tax charge being triggered. This new limit also applies to existing loans. However if the loan exceeds £10000 by even £1 the whole of the loan becomes taxable as a Benefit in Kind.
Where husband and wife are both directors they each have their own £10000 limit.
Be aware that if the loan is not repaid to the company within 9 months of the company year end the company incurs a tax charge.
There are strict anti-avoidance rules so seek professional advice.