Hi all,
Apologies if this has already been answered as I imagine it's a fairly common question but I couldn't find the exact answer I was looking. Perhaps I'm just not very good at searching the forums!
My current situation is I have two Ltd companies:
Old company I was operating as a contractor through with previously and have about 60k there. I am no longer contracting with this and is now operating effectively as an investment company.
New company is now active for my contracting work.
The reason for creating a new company was my accountants informed me it would be easier to do it this way as I wanted to switch to a new partner for the secondary shareholder. Previous partner's other income is much higher than new partner's so it makes sense from a tax perspective.
Question is this:
As I'm still trading in the same capacity I'm not looking to claim Entrepreneurs Relief (ER) IF I closed down the old company but can I extract the money from it as capital gains anyway? Or would I be taxed on it as income?
There is an important additional consideration which is I will have to pay a significant proportion of my income to my ex-wife. She's already bled me to death in a very generous settlement in her favour, while my personal financial situation is still not great. Hence I'm trying to be very careful about avoiding increasing my income for the time being.
Much appreciate your advice on this.
Look forward to hearing from you.
Cheers :-)
Apologies if this has already been answered as I imagine it's a fairly common question but I couldn't find the exact answer I was looking. Perhaps I'm just not very good at searching the forums!
My current situation is I have two Ltd companies:
Old company I was operating as a contractor through with previously and have about 60k there. I am no longer contracting with this and is now operating effectively as an investment company.
New company is now active for my contracting work.
The reason for creating a new company was my accountants informed me it would be easier to do it this way as I wanted to switch to a new partner for the secondary shareholder. Previous partner's other income is much higher than new partner's so it makes sense from a tax perspective.
Question is this:
As I'm still trading in the same capacity I'm not looking to claim Entrepreneurs Relief (ER) IF I closed down the old company but can I extract the money from it as capital gains anyway? Or would I be taxed on it as income?
There is an important additional consideration which is I will have to pay a significant proportion of my income to my ex-wife. She's already bled me to death in a very generous settlement in her favour, while my personal financial situation is still not great. Hence I'm trying to be very careful about avoiding increasing my income for the time being.
Much appreciate your advice on this.
Look forward to hearing from you.
Cheers :-)
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