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Withdrawing for deposit

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    Withdrawing for deposit

    Hi all

    Whats the most tax efficient way of withdrawing large sum from my company account to pay for a house deposit?
    Not buying at the moment but if I find out now best way to do it then can plan for that from now,

    Thanks

    #2
    What did your accountant suggest based on your exact personal circumstance?
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      There is no particular magic. A dividend, I suppose. A large director’s loan comes with interest and withholding tax implications and will count against your LTV too - generally not sensible. Speak to your accountant though.

      Comment


        #4
        There isn't one. Moving money from YourCo to You means you are getting earned income which attracts income tax just like any other earnings.

        Obviously take as much as you can as a dividend at the lower rates on offer, but that only goes so far.

        Only other way is to mysteriously acquire four times as much as you need in a pension pot and take the 25% tax free - if you're old enough of course...
        Blog? What blog...?

        Comment


          #5
          Accountant just said only way is taking it as dividend and accepting that you will go into the second tax bracket.

          Comment


            #6
            Originally posted by xenomorph View Post
            Accountant just said only way is taking it as dividend and accepting that you will go into the second tax bracket.
            Questions for you to think about:
            1. How much money do I want to take out of the company?
            2. How long would it take to pay this money back if taken as a loan?
            3. Could I live with the S455 charge until the money is paid back into the company?
            4. Maybe it's simpler to just take the tax hit and pull it all out as a dividends after all?

            It is possible to borrow from the company with a view to paying this money back. BUT, do check this out with your accountant... obvs.
            ---

            Former member of IPSE.


            ---
            Many a mickle makes a muckle.

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            Comment


              #7
              Originally posted by xenomorph View Post
              Accountant just said only way is taking it as dividend and accepting that you will go into the second tax bracket.
              Agree with your accountant.

              Comment


                #8
                Originally posted by wattaj View Post
                Questions for you to think about:
                1. How much money do I want to take out of the company?
                2. How long would it take to pay this money back if taken as a loan?
                3. Could I live with the S455 charge until the money is paid back into the company?
                4. Maybe it's simpler to just take the tax hit and pull it all out as a dividends after all?

                It is possible to borrow from the company with a view to paying this money back. BUT, do check this out with your accountant... obvs.
                The amount is quite high over 30k but if I take it as a loan from my company then some mortgage brokers may not accept it as a form of income for a deposit.
                I will look into personal loan and compare the fees vs paying the personal tax.

                Comment


                  #9
                  Originally posted by xenomorph View Post
                  ...
                  Not buying at the moment ...

                  My advice?

                  Get your personal finances in order:
                  SAVE, SAVE, SAVE.
                  Spend less, save more. Clear down any overdrafts/loans/credit cards.
                  Max out your premium bonds - it's instant access and can be up to £50k. Might not be the highest return, but it's no risk.

                  Then when it comes time to move, you'll have more available deposit.
                  …Maybe we ain’t that young anymore

                  Comment


                    #10
                    Originally posted by xenomorph View Post
                    ...if I take it as a loan from my company then some mortgage brokers may not accept it as a form of income for a deposit.
                    Do you have a reference for that conclusion? Seems odd.

                    Originally posted by xenomorph View Post
                    ...I will look into personal loan and compare the fees vs paying the personal tax.
                    Don't take out a personal loan in order to contribute to your deposit! That's additional interest lost to another third-party.
                    ---

                    Former member of IPSE.


                    ---
                    Many a mickle makes a muckle.

                    ---

                    Comment

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