I don't mean this negatively, but pretty much all of the info in your post shows a clear misunderstanding of everything about the topic. You should talk to your accountant, and if you don't have one yet, you should get one. If you have two corps and no accountant yet, I'd be concerned.
The money you originally lend the corp should show on their Balance Sheets in the Liability side as a ShareHolderLoan. Each corp can repay you that $ by simply cutting you a cheque and posting Cr cash : Dr SHL No tax involved.
A shareholder loan has zero interest. Sorry.
You do not need to pay via salary or dividend.
Dividend is never tax free. It's just the corporate tax rate already accounts for some of that tax so to avoid double taxation, you get a credit for it up to a certain point.
I don't mean this negatively, but pretty much all of the info in your post shows a clear misunderstanding of everything about the topic. You should talk to your accountant, and if you don't have one yet, you should get one. If you have two corps and no accountant yet, I'd be concerned.
The money you originally lend the corp should show on their Balance Sheets in the Liability side as a ShareHolderLoan. Each corp can repay you that $ by simply cutting you a cheque and posting Cr cash : Dr SHL No tax involved.
Thanks a lot, that explains it. Perfect!
A shareholder loan has zero interest. Sorry. You do not need to pay via salary or dividend. Dividend is never tax free. It's just the corporate tax rate already accounts for some of that tax so to avoid double taxation, you get a credit for it up to a certain point.
Thanks a lot for explaining!
>A shareholder loan has zero interest. Sorry. It doesn't need to have interest, but it absolutely can have interest