My wife (who originally comes from outside EU) borrowed €20,000 from her mother (from abroad), to invest in 20% share of a restaurant, with 1 other investor who owns 80%. They are set up as a limited company and my wife is registered as 20% owner of the shares.
Year 1 just completed, my wife received €6,000 in her share of after tax profits.My wife maintains there is no tax implication for her because so far she has only got back €6,000 of her investment, which she has given back to her mother as part of the loan of €20,000
We are jointly assessed.
Is my wife correct ?
1) Is there any tax implication for me ?
2) How do we declare her investment of €20,000 and the €6,000 return in the investment in our tax return ?
Any insight greatly appreciated.