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Loan from Director

  • 13-12-2016 6:44pm
    #1
    Jonny303
    Registered Users, Registered Users 2 Posts: 634 ✭✭✭


    Hi,

    Just looking for some opinion.

    A director of my company lent a large amount of money (500k) over 15 years to the company, which was paid back in full, without any interest.

    Is there any scope anywhere for that same director to take a short term loan (6 months) from the company for approximately 30k without being hit for BIK?

    I didn' think it was but there is a statement in the annual accounts stating that a maximum of 35k of no interest loans are available to that director.

    Thanks


Comments

  • #2
    Lockedout2
    Registered Users, Registered Users 2 Posts: 402 ✭✭Lockedout2


    There is a difference between company law and tax law.

    A company can give a loan to a director and comply with company law.

    The tax code says that a director gets a benefit from having an interest free loan and that this benefit has to be subject to BIK rules.


  • #3
    Jonny303
    Registered Users, Registered Users 2 Posts: 634 ✭✭✭Jonny303


    Understood. That's a shame but I suppose had the director received interest on that loan he would have been taxed accordingly anyway!


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