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Company to company loans

Discussion in 'New here? Share your story' started by Company Novice, Aug 17, 2012.

  1. Company Novice

    Company Novice Member

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    My wife and i have two companies. I was wondering whether one company can give the other a short term loan without any messy documents having to be drawn up?
  2. apj

    apj Member

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    Hi there,

    It's always a good idea to document these things but in the real world it rarely happens.

    There is a tax provision you need to watch out for which can deem loans from companies to be dividends in some situations however it doesn't apply directly to company - company loans, though can still apply indirectly.

    If your lending company has retained profits and the loan isn't going to be repaid < 30/6/13 you should talk to your accountant just to make sure you don't accidentally trigger something tax-wise you didn't mean to.

    Hope this helps.


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