Dear forum members. I have received a professional loan some time ago, which I am using as a start up capital in my new company. I am now wondering whether I could extend the same loan against allowable interest. And if so, how would this affect the tax situation? Thank you so much for your information.
You can indeed receive from the lendor extra grace on your interest payments on a professional loan he has granted you. This is at his own volition. However, it must be clearly specified that the unpaid and therefore additional borrowing in your hand is added to the outstanding amount. He will be taxed on the interest as if it was received income. You on the other hand will still be able to claim a tax rebate on such additionally lent money.
