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Investing in yourself!

Shared from Tax Insider: Investing in yourself!
By Richard Curtis, November 2023

Loans or shares? Richard Curtis looks at the ‘pros’ and ‘cons’ of different business investments. 

As a business expands or undertakes new projects, it may need injections of capital to fund its trading activities.  

Although the enterprise investment scheme (EIS) and seed enterprise investment scheme (SEIS) come with attractive tax advantages, paid directors are not eligible for the former, and both schemes are blocked for those with a shareholding of more than 30%.  

So, what are the tax implications for those seeking to invest in a company in which they own a majority shareholding? For this article, let us assume the company is a ‘close’ company – owned by five or fewer participators. 

Loans to the company 

Perhaps the most straightforward investment is when a director-shareholder lends money to

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