Quick tax question

[Gertie]

Hi everyone,
Just a quick one if you could possibly help me.

If i invested £10,000 in a new business and then took the £10,000 out of the said business before the end of the year; would i have to pay income tax on the retrieved 10k? (Even though i have paid tax on it originally (in order to earn it))

Stephanie

[Plotloss]

Nope, its a Directors Loan.

(Assuming its a Limited Company)

[Gertie]

Plotloss said:

Nope, its a Directors Loan.

(Assuming its a Limited Company)

Thanks Plotless (yes it is)

[Eric Mc]

Were/are you a Director of the company?

Were/are you a shareholder of the company?

Did the £10,000 cover the purchase of shares in the company?

[Gertie]

Eric Mc said:

Were/are you a Director of the company?

Were/are you a shareholder of the company?

Did the £10,000 cover the purchase of shares in the company?

Hi Eric

1) Yes
2) Yes
3) No

[Eric Mc]

Sounds definitely like a straightforward repayment of a director's loan then. The taxman won't be interested unless the company paid you interest on the borrowed amount.

[srebbe64]

Eric Mc said:

Sounds definitely like a straightforward repayment of a director's loan then. The taxman won't be interested unless the company paid you interest on the borrowed amount.

That's what I like about Eric! Only he would think about the possibility that the company may have paid interest on the loan!