UK Tax on Loans

[PaulR]

Hi,

I am looking to buy a business using a loan and my own money.

The loan will be made by a separate Ltd company owned by a director who will also be a director of my company and will be on commercial terms.

I understand that if I take a dividend and pay back the loan it will be taxed, however if my Ltd company pays back the Loan, will it be subject to tax?.

I have the same question if it is a bank loan.

Thanks for any advice

 

[Idrees]

If you take loan under companies name then interest paid to lender is tax allowable expense for your company but capital repayment will not.