How to take the tax sting out internal business loans

Daniel Baines

If you are a business owner, you probably made a loan to your company when you started out to get the business going. Alternatively, you may have made a loan to your company later if your business needed some assistance with cash flow. You may now be wondering how this loan is treated from a tax perspective.

You, or any one of your other shareholders, would at some point presumably want the company to repay the loan owing to you. When your company is in a position to repay the loan, it may do so without any tax implications for the company or the shareholder; it is merely the repayment of a loan owing to the shareholder.

These types of loans can have negative tax implications, unlike a loan you made to your company. However, there are only potential negative tax implications if the loan is made to a shareholder who holds at least 20% of the equity shares or voting rights in the company and the loan is made by virtue of a share held and not for business or commercial reasons.

Canada Canada Latest News, Canada Canada Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Internal Boeing documents show employees discussing efforts to manipulate safety regulators | IOL Business ReportInstant messages and other internal Boeing documents revealed Thursday show company employees discussing efforts to manipulate US and international safety regulators. Wow. Thats serious. Follow back me
Source: IOL - 🏆 46. / 51 Read more »

Tax breaks could spur economic growth in South Africa | IOL Business ReportTax breaks could spur economic growth in South Africa South Africa’s economic woes have impacted the SA Revenue Services (Sars), who are finding it difficult to meet its targets for the collection of tax revenue. Tax breaks on solar energy for private individuals would boost local solar market significanctly. And who is then paying for the parasites ? Dream on. It's the ANC in charge and they're obsessed with taxing 'the rich'.
Source: IOL - 🏆 46. / 51 Read more »

Busa to meet President Ramaphosa, cabinet to thrash out matters of the SA economy | IOL Business ReportBusa to meet President Ramaphosa, cabinet to thrash out matters of the SA economy Business Unity SA (Busa) announced on Friday that it would be hosting its second Business Economic Indaba 2020 (BEI2020) on January 14.
Source: IOL - 🏆 46. / 51 Read more »