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A registered charity is a company limited by guarantee. The chief executive officer’s son will become an employee and will take over from his father. The charity intends to loan money to assist with housing costs
Our client is a registered charity and a company limited by guarantee. It has annual income of £3m and balance sheet values of £1.6m.
The son of the chief executive officer is moving to the south of England to take over from his father. At present he is neither a trustee nor an employee but his father is a trustee.
To assist with housing costs the charity proposes to make a loan to the son of £95 000 which will be forgiven at the rate of £9 500 a year for the next 10 years as long as the son continues to work for the organisation. Presumably the £9 500 would be subject to PAYE.
Apart from the obvious need to obtain permission from the Charity Commissioners before making this loan we can see a variety of problems regarding benefits in kind loans to...
