Gifting a Directors Loan for IHT purposes

Gifting a Directors Loan for IHT purposes

8:13 AM, 28th February 2019, About 5 years ago

Text Size

James asked ….

I asked some accountants about the directors loan in a company and they said you could gift the directors loan as a potentially exempt transfer for IHT purposes (tick! 😊) but that from the moment, you as a director could then not ever have that money repaid to you from the company loan account.

Is this right?

Response by Mark Alexander ….

Hi James

The advice you accountants have given you is correct, because you cannot have your cake and eat it. However, suppose you gifted the benefit of the loan to your adult children, the company could then repay part or all of the loan to them and in turn they could “lend” the money to you. The loan they make to you would further reduce the value of your estate.

Landlord Tax Planning Consultancy is the core business activity of Property118 Limited (in association with Cotswold Barristers)

Show Book a Tax Planning Consultation

Please visit the book a tax planning consultation page to book your consultation!

There will never be an optimal ‘one-size-fits-all’ business structure for tax purposes. The presentation below provides a useful overview of some of the options you might like to discuss with us.

Share This Article

Landlord Tax Planning Book Now