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  • Tax

    Ltd deposit source advice...

    If you lend money to a company for a deposit and the sale falls through it can repay it without paying any tax.

    If the money is actually used the company will have to pay you back out of profits, after those profits have been taxed.


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    Sorry - I should have made it clear.

    Company 1 has made a profit of £100k (from earnings - furniture sales)

    Could company 1 loan company 2 (a new spv for buying property) £100k - to purchase two houses.

    Then company 2 pays back company 1 each month.


    OR should company 1 just purchas the houses?

    I want to do it in the most tax efficient way.

    I also wasn’t sure about risk to the established funiture business.


    Thanks again.

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    I think the tax is the same either way. Loan repayments aren't taxed. Profit from renting would be taxed the same no matter which company did it.

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