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Lending money to your company?

Lending money to your company?

Did you know that charging interest on any loans made to your company may enable you to receive tax free income?  This is as a result of two savings tax allowances.

In 2017/18, all higher rate taxpayers can claim a personal savings allowance of £500, this means that you can receive up to £500 of interest income free from tax.  For basic rate taxpayers the allowance increases to £1,000.

In addition, for those whose total non-savings income is below £16,500 the savings income starting rate band may apply.  This exempts up to £5,000 of savings income (interest but not dividends) from tax.

For instance, if you have a salary of £12,000 and receive interest of £10,000, £5,500 of your interest would be tax free.  £1,000 from the personal savings allowance and £4,500 from the remaining starting rate band.

For more information, please contact Lesley Sutton on 01484 550037 or email lesley.sutton@revellward.co.uk

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