Repayment of loan from a business partner after April 5th?
I borrowed £48,000 from my business partner in June last year to enable me to move house quickly last year to begin working with him. I thought the loan would be repayed quickly after my house was sold, but that won’t be completed until the end of April at the earliest.
I will not be able to repay him until after April 5th and he has informed me that he will have a tax bill on it of 40% (nearly £20,000), which I will have to pay, and that I will also have a personal tax liability.
This doesn’t sound right to me. I would be very grateful if someone could explain the full implications of my non-repayment by the end of this tax year and any possible solutions, because this sounds really unfair.