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11 Loan or advances to Director by a Co - Coggle Diagram
11 Loan or advances to Director by a Co
Loan to director from INTERNAL FUNDS
ie. capital, RE, Co reserves
S140B is applicable
Co make loan or advances from
internal funds
to
director
(own >= 20% of ordinary sh capital) of Co
applicable regardless loan to director
without int
or
with int rate lower than ALR
taxable
under S4(c)
Co to receive
deemed interest
Loan to director from EXTERNAL FUNDS
ie. banks/ related Co
S140B is NOT applicable
Loan to director from MIXED FUNDS
internal + external fund
only portion related to
INTERNAL FUND
subject to S140B
Loan by a
DORMANT CO
to director
Dormant Co: Co that does X have biz source/ has not commence biz
Co will be deemed to
commence operations
S140B is applicable
Co to receive
deemed int
, taxable under S4(c)
Int Y
deemed to be received by the Co in the BP for a YA is the
higher of
S140B formula
1/12 x (b/f loan + new loan - payments) x Average Lending Rate pa
OR
Int rate charged by Co on the loan to directors
for
director/em'ee
int pd by
em'er
for
external fund
int pd by
em'ee to em'er
taxable as S13(1)(a) Y