Shareholders Current Account

[House Hunter]

Can someone with accounting/tax knowledge explain to me about withdrawals from the shareholders current account?

I have an LTC and put money in for the initial house deposit and put between $1000-2000 per month in from wages to pay down the debt. My current account is therefore growing.

Can I just go ahead and withdraw money from the LTC for what ever reason I like? Or can I only withdraw it for investment purposes?

[Anthonyacat]

The current account is a loan you have given to the company. You can withdraw the money for whatever purposes you like.

[SPerfect]

Ok, adding onto first thread - I put in a significant amount of $$ initially into the LTC to purchase properties, but that be considered as a interest free loan and the LTC drip feed it back to me without tax implications?

[Rosco]

If you are borrowing to repay shareholders current accounts, be careful how you do this and I would suggest you get specific advice to follow the process.

If you are using cashflow to repay shareholders current accounts, then much less of an issue.

Ross

[SPerfect]

Thanx Ross, I hadn't considered borrowing to repay as that seems a bit senseless to me. Was considering using cashflow to repay back over time

[Wayne]

Thanx Ross, I hadn't considered borrowing to repay as that seems a bit senseless to me. Was considering using cashflow to repay back over time

Senseless?
Depends on what you want the money back for really.

[Anthonyacat]

Borrowing to repay makes a lot of sense if you would otherwise be borrowing anyway.

Rather than getting a personal mortgage to buy a new house, or a personal loan to go on a holiday, the company can borrow to repay your current account, and that debt is then deductible.

But as Ross has said, LTCs complicate this a little.