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Frank said: 24 January 2024 at 10:18 What are the tax implication if I loan money to my company to buy a vehicle? We have a loan agreement in which the company will repay the loan to me in instalments over 36 months. The agreement also states that I am able to use the vehicle for business purposes and that I should pay an additional fee for a maintenance plan. |
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TaxTim Alicia said: 24 January 2024 at 13:15 If the company owes money to the director, there are no tax issues for the director or the company. It is recommended to regulate and support these loans with appropriate loan agreements and market-related interest clauses. Prevailing rates of interest are advised until the loan is repaid. Loan accounts where the director owes the company do raise tax consequences in the form of a deemed dividend at the end of the financial year and the reporting that it affects. The cost of the maintenance plan would need to be repaid to you too, please ask the company to include this repayment in the loan agreement too. Regarding the use of the vehicle, if you are an employee of the company, you should keep a travel logbook to ensure that you are able to claim a deduction against the fringe benefit which might arise. |
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