It is possible to get tax relief on a loan to buy shares on a trading company controlled either by its directors or by five or fewer people (known as a close company). That is providing at the time the interest is paid you either own more than five per cent of the issued ordinary share capital or you own any part of the ordinary share capital (however small) and work for the greater part of your time in the management or conduct of the company.

However, in the current environment for raising finance you may need to talk to finance providers to ascertain whether this is available or if they require additional security such as a personal guarantee.

The conditions surrounding the tax relief are very specific and you should talk to a chartered accountant with experience of obtaining the relief from HMRC before entering into an agreement to buy the shares. 

See also: Raising finance with your business plan

Related topics: Tax & Vat