In 2003 I started a Ltd company. Over the next few years the business had accrued a business loan from my bank together with an overdraft, both secured on my home. By early 2009 these totalled about £80,000.00. I approached my bank to refinance these into one business loan and to ask if there was anything I could do to reduce the business' corporation tax bill. The loan had affected the directors loan account and meant that corporation tax was due in this regard. At this time the business was severely affected by the recession. The advice to reduce the corporation tax was that if I took out a personal loan paid off the business loan then I would be introducing capital into the business and no corporation tax would be payable. The new loan would still be secured on my house. I was uneasy about this but the as the business was in dire straights and without refinancing would have had to cease trading, I agreed. Unfortunately the bank said that they could not actually grant a personal loan as my personal income had fallen to next to nothing. What they could do was to give me a new business loan but not in the name of the Ltd Company. In order to do this they made use of an old unused business account I had along with my wife, this account had no income or expenses and had not been used in some years. I was not asked to provide any books or other financial information for this "business". The bank affectively invented a business in order to lend to it. Over the next 3 years I continued to make payments on this loan although it became clear that the whole thing had been a bad idea as the Ltd Company, while having no corporation tax bill, could not set the interest on the loan against any income. The business eventually failed in 2012 being wound up by HMRC for a relatively small sum. I still have to pay the loan and will have to until I am 70 and I still cannot get any relief for the interest. Was the bank's behaviour legal?