Interest cost - tax relief
Tax Planning and Financial

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4 Posts
6 months ago

Anyone have any thoughts on this please:

I have a small Ltd company with 4 properties in it. I have approx 150k of my own money in the company (in the form of Directors Loan account). I have a personal mortgage of 150k costing around 7.5k per yr in interest payments. I understand I can charge the company intrest on the 150k, i.e. the company pays me 7.5k as an expense, but then I would have to declare that 7.5k as an income for my personal tax return and pay income tax on it. Surely, as the 150k could be used to pay off my mortgage, hence save me 7.5k in personal expenditure the payment should be tax free? Am I missing something or is this just a case of 'suck it up'?

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