How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4351
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

Have just invested £100,000 into a newly formed commercial

Customer Question

Have just invested £100,000 into a newly formed commercial LLP. What is the best way to treat this investment, as Capital Introduced or as Loan Capital to obtain the most tax relief. Is their any relief in respect of this investment other than through the initial trading losses comparable to the EIS scheme, Entrepreneurs Relief, ......?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer and pleased to be able to help you with your question. If you introduce this as capital then on ultimate disposal any gain will be subject to Capital Gains Tax (CGT), but Entrepreneurs' Relief will apply which will limit the CGT to a flat rate 10% instead of the usual 18% or 28%. EIS applies to limited companies; a LLP is not a limited company. If introduced as loan capital its ultimate withdrawal will be outside the scope of taxation. However, any interest earned will be subject to Income Tax at your marginal rate. I do hope my reply has shed some light on your investment.