Tax af­fairs are made sim­ple

Halifax Courier - - Business -

busi­ness at 5% per an­num. Her only other in­come is a small salary of £10,000 a year from her hus­band’s busi­ness. The £5,000 in­ter­est would po­ten­tially save up to 45% in­come tax plus na­tional in­sur­ance for Mr Smith, whereas Mrs Smith would re­ceive £5,000 in­ter­est tax free. CAP­I­TAL TAX IM­PLI­CA­TIONS OF THE LOAN Al­though the loan to the busi­ness in the ex­am­ple above is tax ef­fi­cient (in that there is no in­come tax due from 6 April 2014) it would also be im­por­tant to con­sider the CGT and IHT im­pli­ca­tions of the loan. Should the busi­ness de­fault, it may be pos­si­ble to ob­tain re­lief as a cap­i­tal loss against cap­i­tal gains in the same or future years. There would, how­ever, be no in­her­i­tance tax busi­ness prop­erty re­lief should the lender die with the loan in place. Please con­tact us for fur­ther ad­vice in this area. Please con­tact a mem­ber of our Tax Team if you would like to dis­cuss any of the is­sues raised in this news­let­ter. You can find our de­tails through www. broad­ (Please reg­is­ter) or phone us on 01422 347 880.

Adrian Broad­bent

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