Running down a company

[2BA]

Later this year I'll be finishing my current contract & heading off for maternity. After that, we're thinking of me not going back to work

The problem is (but a nice problem), I have quite a bit in my business account.
As far as I'm aware -I've never looked into it but can't imagine I'm eligible -I'd get no benefits from choosing to be a SAHM, so I wouldn't be losing anything if I continued to be employed by the ltd company.

Would it be considered wrong to run it for a couple of years, paying myself monthly & a nice, little from April this year, dividend each year whilst the company has no income? The tax man would end up owing me a tax refund each year as there would be expenses but nothing to offset it against...

From what I can work out it's the most tax efficient way.

Any thoughts/comments/jibes?

Thanks

[northernladuk]

You were never employed by the LTD in the first place were you?

Surely your accountant is the best person to answer this and should really be your first port of call. You can have a good chat about many of the details that you are missing here and benefits available based on that discussion. We can only give you an opinion on a situation involving a large amount of money from 10 odd lines of text.

[LondonManc]

Agree with NLUK - ask your accountant. While you're at it, if you go with the longer term option that you've talked about of slow salary and dividend drain, then negotiate a better yearly rate with them for what they'll be doing for you; no preparation of VAT returns, etc.

[ASB]

- You can pay the dividends out over time.

- If not trading there is a risk it could be seen as a close investment company. This attract a higher rate of corporation tax (though if there is little in the way of income or gains it doesn't really matter.

- The expenses are only allowable if they are in persuit of a trade. You might stuggle to argue that you are

- If aggressive pay yourself 10k PA salary for "looking for opportunities". Then use carry back relief to get a couple of grand back. (In this circumstance it might be useful to find the odd piece of paying work here and there!)

- Don't forget that thje dividend regime is getting worse with the additional tax on it

- Consider whether MVL may be better to get funds out via ER and charged to the capital taxes regime

In order to get cash out with no further tax post 2016/17 you need to keep the dividends to < 5k.

[TheCyclingProgrammer]

If you have no intention to continue working for a while then I agree that it might be worth looking into liquidation now and getting the cash in your bank account. In order to qualify for ER you need to be trading and I'm not sure whether you'd be eligible after years of doing no work.

Get your accountant to run through the numbers and see what makes sense but if I were you I'd be looking at getting the money in my own account where I could do whatever I want with it.

[wantacontract]

take your dividend and income as per normal the 1st year (one cna easily be looking for a job for a whole year and not find anything) and then close it down the next for entrepreneur relief the year after - if you intend to be stay at home mum for the next few years..