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Director Loan To Company

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  • 29-06-2021 12:54pm
    #1
    thebiggestjim
    Registered Users Posts: 345 ✭✭


    Hi All,

    I will be getting professional advice in the future but wanted to ask here before I do that.

    My partner and I want to fund our new venture (about EUR50K) with a directors loan from us to the company. We would like it to be a 0% interest loan to be repaid over 5 years. We don't want any tax obligation to either us personally or the company due to this loan. My understanding is there is no obligation on us from Revenue to charge an interest rate above 0% on a loan to the company.

    Has anyone done this before and can offer some advice?

    Thanks.


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    #2
    silver2020
    Registered Users Posts: 2,045 ✭✭✭silver2020


    There's no issue at all.

    I've done it myself and it simply sits there as a borrowing with a note in the accounts. I did ensure that there was a paper record of it with the terms of repayment.

    "Payment on demand in varied amounts and final payment no later than 10 years" (this was just our own decision - you can put in anything you want)

    A reference to the payment date was also made and the agreement was sent to the accountant to file away.


    Last year we installed a new kitchen at home and withdrew €15,000 of the amount. This year I changed cars and withdrew €20,000. Still leaves a decent amount and has meant no costly bank borrowings and has allowed me top up pension contributions.


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