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Loans to directors – beware of the higher section 455 charge
Read this article to find out about the rate of section 455 tax on outstanding director’s loans. #directorsloans #section455tax
Directors’ loans – Beware of ‘bed and breakfasting’
It can make sense financially for directors of personal and family companies to borrow money from the company rather than from a commercial lender. Depending on when in the financial year the loan is taken out, it is possible to borrow up to £10,000 for up to 21 months without any tax consequences. However, if the loan remains outstanding beyond a certain point, tax charges will apply.