New LTD Company - I am Director and I want to lodge my personal savings to company bank a/c

[buckfast]

hi all

I have just setup a LTD company, I am Director, my wife Secretary. I have 15k euro in cash from personal savings that I want to lodge to the business bank account so it can start to purchase some assets for trade. As I understand it, the company would then owe me back this money and is recorded on the company's Directors Loan account? Can I receive back this money from the company tax free, and is it simply a matter of drawing up a simple loan agreement between me and the company, and then have the company pay me back periodically once the company starts to generate revenue?

Thanks
B

 

[T McGibney]

hi all

I have just setup a LTD company, I am Director, my wife Secretary. I have 15k euro in cash from personal savings that I want to lodge to the business bank account so it can start to purchase some assets for trade. As I understand it, the company would then owe me back this money and is recorded on the company's Directors Loan account?

Correct.

Can I receive back this money from the company tax free,

Yes.

and is it simply a matter of drawing up a simple loan agreement between me and the company, and then have the company pay me back periodically once the company starts to generate revenue?

No need for a loan agreement. Just make sure you keep a clear record of the various transactions.

 

[buckfast]

Thanks a million T, that's really helpful and looks like it's a lot more straightforward than I initially thought. I assume if I am to charge interest on the loan, then it might get a little more complicated, and secondly, if I am to transfer ownership of a personal asset to the company then I the company will also need to pay me back cash to the market value of that asset too?

 

[T McGibney]

Thanks a million T, that's really helpful and looks like it's a lot more straightforward than I initially thought. I assume if I am to charge interest on the loan, then it might get a little more complicated, and secondly, if I am to transfer ownership of a personal asset to the company then I the company will also need to pay me back cash to the market value of that asset too?

You're very welcome. Don't bother with charging interest on the loan - you'll only be creating a tax liability for yourself on the interest income.

If you transfer ownership of a personal asset to the company, you can either have the company repay you for its market value, or simply leave a balance repayable to you on the company accounts, which can either be repaid to you (possibly in lieu of taxable salary) or debited against cash withdrawals etc in due course.

 

[LS400]

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A cleanly asked question, and a very clear answer