Borrow to lend

Our client wants to raise a loan by mortgaging his own house and he then plans to lend the capital raised to his company (he is the director and majority shareholder).

The company will then repay him the precise cost of the interest and as the company repays the loan that will be repaid to the provider of the loan.

By way of explanation the company already owns some commercial properties and wishes to purchase another one.

However while it has some spare cash funds it does not have sufficient and hence the need for the loan from the director.

As further clarification if the director was to draw more money from the company say as a dividend this would be liable to income tax at the higher rate.

Can...