Discussion
Not altogether sure.
However, if an outside source loans money to a company and charges interest on the repayments, the company can claim the interest as a normal business deduction in its annual Profit and Loss account. So the company will get Corporation Tax relief on the payments.
In some circumstances it is required that companies paying interest must deduct tax at source on the interest repayments and pay this tax over to the Revenue on a quarterly basis (e.g. if the loan was from a director this would certainly be the case).
Regarding a loan received from a pension fund, it would be assumed that the interest received from the loan (as it would be income in the hands of the pension fund) would not count as taxable income as far as the prnsion fund was concerned. If the payee i.e your company, had been forced to deduct tax at source on the interest repayments, the pension fund should be able to have that tax paid by the company refunded directly into the pensions fund - once it had submitted a tax reclaim application to the revenue.
Obviously, with the pension fund having beneficiaries who are also directors of the company, there would have to be whole slew of discloures in the company accounts.
However, if an outside source loans money to a company and charges interest on the repayments, the company can claim the interest as a normal business deduction in its annual Profit and Loss account. So the company will get Corporation Tax relief on the payments.
In some circumstances it is required that companies paying interest must deduct tax at source on the interest repayments and pay this tax over to the Revenue on a quarterly basis (e.g. if the loan was from a director this would certainly be the case).
Regarding a loan received from a pension fund, it would be assumed that the interest received from the loan (as it would be income in the hands of the pension fund) would not count as taxable income as far as the prnsion fund was concerned. If the payee i.e your company, had been forced to deduct tax at source on the interest repayments, the pension fund should be able to have that tax paid by the company refunded directly into the pensions fund - once it had submitted a tax reclaim application to the revenue.
Obviously, with the pension fund having beneficiaries who are also directors of the company, there would have to be whole slew of discloures in the company accounts.
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