50K Expense Limit

Hi everyone,

A quick query. I have been going through the forum but bit confused regarding one point.

If 50K is transferred in one go from personal to business account via Unsecured Director's loan, 50K investment is satisfied. Moreover, the money will be spent on rents, employees' salaries, advertisement. But What about the limit on expenses? Is there any requirements that all 50K has to be spent within 3 years for the entitlement of Extension?

Please kindly shed some light under it.

Thanks

pichas wrote:Hi everyone,

A quick query. I have been going through the forum but bit confused regarding one point.

If 50K is transferred in one go from personal to business account via Unsecured Director's loan, 50K investment is satisfied. Moreover, the money will be spent on rents, employees' salaries, advertisement. But What about the limit on expenses? Is there any requirements that all 50K has to be spent within 3 years for the entitlement of Extension?

Please kindly shed some light under it.

Thanks

This question is being asked almost everyday sometimes more than once a day here. The guide and rules do not say anything about this unfortunately.
They only tell you what you should NOT spend your money on like paying back the money to yourself as salary, invest in residential property and property management, or purchase a business from previous owner.
They also tell you that merely transferring money from your account to a business is NOT considered investment. I think they seem to be satisfied if you show that you have spent all or large portion of it to pay your expenses and you are planning to continue to do so. I really think this needs proper clarification from HO.

Thanks zimba88 for taking out time to respond. Much appreciated!!

Hi Zimba88,

Based on the above , a simple question what should be the reference while transferring the funds from personal to business ( should the ref be invesment or director loan 1 , since iam planning to do atleast 3 transactions )

Appreciate your quick response

Rayees wrote:Hi Zimba88,

Based on the above , a simple question what should be the reference while transferring the funds from personal to business ( should the ref be invesment or director loan 1 , since iam planning to do atleast 3 transactions )

Appreciate your quick response

Better to be Director's Loan

Thanks Zimba88, one more question does Paying bonus to the employees be considered towards the inverstment in the form of expenses or no

Rayees wrote:Thanks Zimba88, one more question does Paying bonus to the employees be considered towards the inverstment in the form of expenses or no

yes, you should be fine