Putting money from a family member into my business

ac-invest

Registered User
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What is the best/most tax efficient way to put money into my business from a family member?

If I took an interest-free loan at 50k and 50k at 6% simple interest loan from the same family member. The loan at 6% would be within the family member's capital gains allowance. My main question is surrounding the 50k interest free and would anyone have suggestions how to handle that portion. The interest-free loan will not kick in for a few years the 6% interest loan will commence on receipt on the funds

Thanks
 

RedOnion

Frequent Poster
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4,594
The loan at 6% would be within the family member's capital gains allowance
Few points.
50k @6% is 3,000. This is outside personal capital gains allowance.
In any event that's not relevant, as interest income would be subject to income tax.

How is your business structured? Is it a company or sole trader?
 

ac-invest

Registered User
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11
For some reason I thought it was €3,000 allowance. It's a company. Any other ideas for funding without creating a tax burden on the company or the lender? Even if it's interest free. If interest free, is there any problem with me paying them back out of company from a tax point of view?
 

RedOnion

Frequent Poster
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4,594
But surely the family member is better off receiving taxable income than no income? Its tax deductible for the company within limits.

There are lots of anti-avoidance measures in place, so not many simple options. Would family member become a shareholder?

Make sure you are familiar with section 237 of the companies act re loans from connected parties.
 
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