UK Tax relief for interest on business loan

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Hi,

I have invested £10,000 in a company I am involved with at an agreed rate of interest of 5% per annum.

I do not expect repayment of the loan for some years and have been told that I can claim tax relief on the interest that will accrue on the loan until it is repaid.

Is this true and if so how to do I do it?

I understand I that when the loan and interest is eventually repaid I will have a tax liability.

Thanks.
 

Truemanbrown

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The Company
The company can claim the interest that it has paid on the loan from yourself. When interest is paid:-
1. the company will pay you the interest net of basic rate income tax and should give you a certificate of tax deducted form R185 with each payment of interest;
2. the company must complete the Form CT61 and remit the tax deducted. Forms CT61 are normally filed on a quarterly basis.

You
The interest you receive should be included on your self assessment tax return and any further tax due paid over.
 

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