Tax implications taking money out of my company

D

denby11

Registered User
Messages
45
I currently have a significant amount of cash sitting in my business current account. An investment opportunity has come up which requires about 50k cash. In a personal capacity I wouldn’t be able get my hands on this for about 6 months.(a property on the market which will take time to close)
What are the tax implications of taking this money of the business until next March as a personal loan?
 
You have used the word company in your title, but then you use the word business in your query. Just to be clear, is the money inside a limited company at present?
 
Apologies yes it is a limited company and I’m the sole shareholder. In the past I have loaned the business money from my personal accounts and taken it out again, now I want to take it out but will be in position to return it but after my financial year end.
 
From a tax point of view you would be liable to income tax on a benefit in kind, with the value of the benefit being 13.5% p.a. on the amount of the loan. If it's a 50k loan, the benefit would be €562 per month. This would need to be taxed through payroll at your marginal rate of tax, PRSI & USC, a tax cost of €280 per month, if you are a high rate taxpayer.
See here

Preferential loans

A preferential loan is a loan made by you to your employee or former employee, or their spouse.
www.revenue.ie www.revenue.ie

The other issue is a company law one. Directors are not allowed to take loans in excess of 10% of the company's net assets, unless certain formalities are observed re paperwork and statutory declarations, which can effectively render the directors personally liable for the company's debts. So tread carefully.
 
Last edited:
You must log in or register to reply here.
Back
Top