Taking large amount out of my business account

[ensignia]

Great news, chaps! My wife is essentially bankrupt and it's up to me to bail her out

Anyway, I have built up a decent warchest and want to extract a large amount from the business coffers. I've yet to take any dividends at all this year, and have only taken minimum salary.

What's the best way to do this without being stung too heavily? Say, for example, I wanted to withdraw £100k (nice round figure), am I just deluding myself into thinking I won't have to pay circa £25k tax on it?

My wife is not secretary of the company nor is anyone else other than me a shareholder, for what it's worth. I would divorce her, but that'll probably end up costing me even more.

Any advice will be warmly received.

[NotAllThere]

Why can't she go bankrupt?

[northernladuk]

This is standard tax planning and advice which your accountant can give you based on your exact situation. They can advise whether you can get enough out over 2 tax years with April not so long off, whether a loan is prudent etxlc etc.

[I just need to test it]

I would divorce her, but that'll probably end up costing me even more.

Any advice will be warmly received.

Looking at this long-term, I see divorcing a spendthrift as an investment. Sure, there's a huge down-payment upfront, but looking a few years down the line, when all that lovely money is to be shared between just you and the taxman, you'll be quids in.

At least that's been my experience.

[VectraMan]

Why can't she go bankrupt?

WHS. Has somebody advised you that you're liable? Otherwise her going bankrupt might be less bad than the alternative.

[ensignia]

Thanks for all the responses so far.

I mean, we could let her go bankrupt, but it seems like it would be silly of us to let it get to that stage - especially as I have some excess funds sloshing about

I was more interested in seeing whether anyone on here had taken out a large amount (for whatever reason), and not automatically bent over for the Taxman in the process?

My accountant is recommending taking the hit, but I know there are some knowledgable folk on here, and to be perfectly honest I have more faith in this place than I do my accountant...

[Darren at Fox-Bartfield]

My accountant is recommending taking the hit, but I know there are some knowledgable folk on here, and to be perfectly honest I have more faith in this place than I do my accountant...

Just waiting for @NLUK to come in!

That sounds like you need to change!! If you don't have confidence in your accountant then that's a real issue!

[DaveB]

Thanks for all the responses so far.

I mean, we could let her go bankrupt, but it seems like it would be silly of us to let it get to that stage - especially as I have some excess funds sloshing about

I was more interested in seeing whether anyone on here had taken out a large amount (for whatever reason), and not automatically bent over for the Taxman in the process?

My accountant is recommending taking the hit, but I know there are some knowledgable folk on here, and to be perfectly honest I have more faith in this place than I do my accountant...

If there is no link back to you in terms of the liability and bankruptcy you would probably be better off with that. It will hurt her credit rating but provided it doesn't impact yours then thats probably a better option.

Bear in mind that bankruptcy is generally only a viable option for debts over £20,000 where you have minimal assets, no equity in property etc. and no realistic prospect of that changing.

[SueEllen]

You need relationship counselling.

If your wife has managed to get into such a bad financial situation and did not tell you, then whether you realise it or not there are problems in your relationship.

I suggest you spend money on this before deciding whether to give her the money OR just pay off the rest of your joint debts and get out of the relationship. Remember until you are clean divorced from her you are liable for all joint debts.

[Darren at Fox-Bartfield]

Finances

It will hurt her credit rating but provided it doesn't impact yours then thats probably a better option.

Removing a financial association is an option but not so much for a husband/wife. From memory, these can only be submitted for husband/wife once divorced as up until this point the finances are still linked.

So it will have an impact on both, especially if hold joint assets (e.g. house).