Loan cash from CC - Fringe Tax

[daveob]

I want to borrow cash from the CC ( I am the sole member ).

Just for discussion, lets say R 100 k.

How do I process this ?

Assuming I need to :
DR Bank Account.
CR Short Term Loan Account ?

What rate of interest do I use - the 'official' SARS rate of 7% ?

Is interest calculated once off on the capital amount, or calc and compond monthly ?

Where do I show the interest in the books each month : DR Interest Received and CR Short Term Loan Account ?

As the rate of 7% is the same as the SARS rate for low-interest loans, must it ( or the fringe benefit ) be shown on the members IRP5 ?

If so, what codes and what amounts ?

Or is it only to appear on the members personal income tax forms when filed ?

Or is it a case that if the interest rates are both the same (7%) that there is therefore no fringe benefit, and it therefore does not need to be added to the IRP5 or the income tax form ?

[CLIVE-TRIANGLE]

I want to borrow cash from the CC ( I am the sole member ).

Just for discussion, lets say R 100 k.

How do I process this ?

Assuming I need to :
DR Bank Account.
CR Short Term Loan Account ?
CR Bank DT Loan Account

What rate of interest do I use - the 'official' SARS rate of 7% ?
8.5%
Is interest calculated once off on the capital amount, or calc and compond monthly ?
Compounded monthly
Where do I show the interest in the books each month : DR Interest Received and CR Short Term Loan Account ?
DT Loan Acc CR Interest Receive
As the rate of 7% is the same as the SARS rate for low-interest loans, must it ( or the fringe benefit ) be shown on the members IRP5 ?
The loan is the result of a beneficial interest in the equity, hence it is a shareholders loan (company, cc, no difference. The difference in interest charged and 8.5 (you say 7 - you may be right) is a distribution of profit and therefore not a fringe benefit, which only an employee can receive. The distribution is treated exactly the same as a dividend and must be accounted for and the tax paid, by the CC, without any SARS intervention
If so, what codes and what amounts ?

Or is it only to appear on the members personal income tax forms when filed ?

Or is it a case that if the interest rates are both the same (7%) that there is therefore no fringe benefit, and it therefore does not need to be added to the IRP5 or the income tax form ?

I think your 7% would be in respect of a normal loan to an employee. In your case I would suggest 8.5, who cares actually, because it's the same money, is it not?