Tax rules for shareholder loans
A loan made by a Jersey company to a Jersey resident shareholder or to a member of their family or household is liable to tax.
Filling out the form
Amounts borrowed
If during the year the company has lent to you or increased the amount it has lent to you complete the section as follows:
- the company name
- the company tax reference
- the amount borrowed
- enter ‘B’ in the borrowed box
If the loan relates to your spouse or civil partner tick the box for spouse of civil partner.
Amounts repaid
If during the year you have repaid or reduced the amount of money lent to you by the company complete the section as follows:
- the company name
- the company tax reference
- the amount repaid
- enter 'R' in the repaid box
If you’re entitled to a tax credit enter the amount available. Keep a record of the supporting calculation as we may ask for this.
If the loan relates to your spouse or civil partner tick the box for spouse of civil partner.
Amounts borrowed and repaid in the same year
If during the year you have repaid part or all of the loan from the same company in the same year as it was borrowed, you would enter the net position of the amount borrowed at the year end.
Apportioning a tax credit
To apportion the credit the following formula is used:
S / O × T
- S = the amount you repaid in that year
- O = the total amount of your loan at the end of the year after any additional loan amounts and any amounts you’ve repaid
- T = the amount of tax you were charged on the loan in the year the loan was made
More information about calculation of shareholder loan credit
Exemptions
A shareholder loan is not taxable if:
- the loan advanced is at a commercial rate on interest by a company whose ordinary business is that of money lending
- the company making the loan is a utility company or a company in the cannabis industry
- the company making the loan has an exemption under Article 118C of the Income Tax (Jersey) Law
gov.je