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Are losses worth anything?

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    Are losses worth anything?

    My company has been making a loss for a few years due to ill health, working abroad etc.

    I was planning a triumphant return to the UK contracting market where I could live it up tax free for a while.

    Since this now seems to be off the cards, I’m wondering what to do. If I close the company, would I lose all the tax freeness I’ve built up?

    Is there any way of selling the losses?

    Another possibility is transferring a spare house into the company and letting it out. I guess I could take all the rental income tax free for a few years?

    I’m a bit ignorant about all this stuff, so ELI5 please.

    #2
    No

    Grow up


    Sent from my iPhone using Contractor UK Forum

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      #3
      Google "MCINOCOT". Basically if the losses were made by you contracting, then unless you make profits in future from you contracting, via the same company, then those losses are dead.

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        #4
        Originally posted by hugebrain View Post
        My company has been making a loss for a few years ...
        Do you mean you've been taking money out of it, when there was no money to take?

        Let's say the company books were £10k in the red at the end of last year, then you paid yourself £45k in salary and dividends, meaning the company is now £55k in the red.

        Do you intend to keep taking money out until the banks, etc, stop lending it to your company?
        …Maybe we ain’t that young anymore

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          #5
          Originally posted by WTFH View Post
          Do you mean you've been taking money out of it, when there was no money to take?

          Let's say the company books were £10k in the red at the end of last year, then you paid yourself £45k in salary and dividends, meaning the company is now £55k in the red.

          Do you intend to keep taking money out until the banks, etc, stop lending it to your company?
          Unfortunately not, if I owed other people I could probably Phoenix and make a fortune. Just paying the salaries while I was ill, with my own money.

          I expect just letting the company become dormant and then reopening it if I decide to come back to the UK is the best thing to do. Or else doing mini-contracts evenings and weekends to keep it ticking over.

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            #6
            If you owe a small amount, that is your problem. If you owe a huge amount, that's someone else's problem!
            I couldn't give two fornicators! Yes, really!

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