What do rich people do?

[mlc2009]

Hi All,

Have a query. I see a few posts in this forum, and people say that they normally take out dividends from the company, to avoid less tax. They don't take high dividends out to avoid higher tax bracket, but what if you had a company turning over £1m+ profit and your the sole owner? Taking out 100k a year would save less tax but wouldn't be able to buy a house etc. Are dividends of £500k+ normal?

[BlasterBates]

Jump for joy that their problem is how best to minimise tax on 1million quid.

The next thing they would do is go and see an accountant, after all HMRC will paying around 50% of the fees. I could imagine that retaining profit for less profitable years might be a good idea.

[kingcook]

What do rich people do?

Let me google that for you

[Nixon Williams]

Provided the company has the profits, then the company can pay whatever level of dividends they deem fit.

I seem to recall that Philip Green's Arcadia Group paid out dividends of £1 billion a few years ago, although as the shares are held by his Monaco based wife, the extra tax was not an issue.

[bless 'em all]

That's a good question.

I tell governments to write off Third World debts using their tax-payers money whilst hiding my fortune in off-shore accounts and tax havens.

Bono

[Sally@InTouch]

Hi All,

Have a query. I see a few posts in this forum, and people say that they normally take out dividends from the company, to avoid less tax. They don't take high dividends out to avoid higher tax bracket, but what if you had a company turning over £1m+ profit and your the sole owner? Taking out 100k a year would save less tax but wouldn't be able to buy a house etc. Are dividends of £500k+ normal?

They usually pay equally rich business advisers lot's of money to set up complex offshore arrangements. Mr. Carr springs to mind recently, although his wasn't a particularly complex arrangement.

[LisaContractorUmbrella]

They spend all of their time working on earning their next million and pay a very very good accountant lot of money to worry about their tax bill

[northernladuk]

I have a great family, a house I like, a car I like and fabulous friends. That makes me as rich as anyone........ but I don't have enough cash to make it worth investing

[BrilloPad]

I get my butler to sort it

sadguru

[Gaz_M]

Hi All,

Have a query. I see a few posts in this forum, and people say that they normally take out dividends from the company, to avoid less tax. They don't take high dividends out to avoid higher tax bracket, but what if you had a company turning over £1m+ profit and your the sole owner? Taking out 100k a year would save less tax but wouldn't be able to buy a house etc. Are dividends of £500k+ normal?

A question I have always wondered about too but I think setting the turnover at £1m+ profit has turned the thread into irrelevant answers for contractors.

I've just set out on my 'Plan B' & if it takes off like I hope, within 3 or 4 years I would have a company turning over at least £100k and more likely £150k+. At the moment my company turns over around £75k as a contractor & I pay myself around the £40k+ mark to avoid extra tax BUT if Plan B works then I'd certainly want to get my hands on more of the company cash. I've also wondered what people in that position do & what people do if it increases to £200k, £250k etc. One million plus is a whole new ball game though & certainly not relevant to me.