As we have noted with talk of a 10p tax rate comes talk of the end of mortgage interest relief. With this possibility comes scope to open up a very interesting debate with company directors and partners who have credit balance loan accounts or capital accounts i.e. their business owes them money!
If this position exists and the business can access sufficient cash ( even temporarily) to repay the loan the "lender" director or partner could consider paying off some of all of his mortgage, interest on which qualifies for little or no tax relief.
If a subsequent loan were taken by the director/partner (secured on to property even) to lend to his business, under current rules the interest would be deductible without limit.
Of course care and professional advice is necessary but it is though that subject strictly to this there might be more than a degree of interest in this "oldie but goodie".
In closing we reiterate that "getting the order right" is absolutely essential with loan account repayment preceding the new borrowing. There should also be some time between the two events and the ability to show that the two events were not connected.