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Don’t lose interest (relief)!

Shared from Tax Insider: Don’t lose interest (relief)!
By Mark McLaughlin, November 2021

Mark McLaughlin highlights a potential trap for company owners seeking tax relief for interest on loans to acquire shares or lend funds to property investment companies. 

Many landlords set up companies to own investment properties. There are several possible reasons, such as increased flexibility of company ownership compared with owning interests in properties personally, and the ability to extract profits by dividends. 

Financing property acquisitions via a company might be through company borrowings. Alternatively, company owners may borrow funds to invest in the company. 

Financing the company 

Tax relief is available for interest paid on a loan to purchase ordinary shares in the company if certain conditions are satisfied. Alternatively, a relief claim may be possible if personal borrowings are lent on to the company, which uses&nbsp&

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