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Posted Fri, 24 May 2024 09:30:01 GMT by terencheung
Dear Sir/Madam, I am director and shareholder of a limited company in UK and I lend some monies as an 3% annual interest loan to the company. My questions are: 1. Can the interest be accrued said in 2023-24 financial year without actually paid to me and the company still be enjoy the tax relief of treating the accrued interest as expenses? 2. Is there any time limitation to accrued the interest say till 2024-25 or even 2025-26? 3. Do I need to include/report the accrued interest in my personal self-assessment tax return for 2023-24? Will the accrued interest be treated as part of my income in 2023-24? Thank you very much 

Name removed admin .
Posted Wed, 29 May 2024 13:37:03 GMT by HMRC Admin 10
Tax is calculated using the arising basis.  If you receive interest from your loan in a tax year, you are the beneficial owner of the interst and you will need to declare it.
Posted Fri, 31 May 2024 12:29:08 GMT by terencheung
Hi, When you say tax is calculated using the arising basis, so does it mean that the accrued interest that is not yet paid or credited still be considered as "arising" or not? So, for the company, the accrued interest (not yet paid) is still tax deductible as expenses? For the director, the accrued interest (not yet received) is not considered as part of the personal income? I appreciated if you can clarify more on the "accrued" treatment. Thank you very much. Best regards
Posted Wed, 05 Jun 2024 09:51:24 GMT by HMRC Admin 25
Hi terencheung,
Please refer to:
SAIM2450 - Interest: taxation of interest: accrued interest
Thank you. 

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