You gotta pay for it

 

Be very careful to make sure if you have a company or a trust and you want to claim an expense, this expense has actually been paid by the company or trust – not by you. 

 

For example, sometimes people organise a bank loan for their company, but the bank makes the loan out to you. The interest on the loan is not a tax-deductible expense of the company.

If you have just done this, don’t have a heart attack. There are two solutions:

 

1. You could draw up an agreement between yourself and the company, which would state that you have borrowed the money as agent for the company. Make sure you have the correct wording. Hand the job to an expert. 

 

2. A nice easy way is to charge the company for your loan. Again, some sort of document confirming this arrangement and signed by the directors of the company is advisable. Make sure you are making a small profit on the transaction. That profit has to be included in your personal tax return.

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