Fellow Director Taking Permie - How to divest their earnings and interests ?

[AussieDigger]

Have a fellow Director who is taking up a permie role now but having earned quite a bit into the business should be able to take it out in effect.

What's the best way for them to take their earned income out of the company at the lowest tax rate before/after they go perm ?

if they remain active in the business, but not as a 'contributor' in terms of income, can they continue to receive dividends and pension deductions ?

Or is it best for them to simply 'sell' their shareholding or resign (how to handle their earnings at lowest rate of tax).

Hope this makes sense. Suggestions and options welcomed !

[oracleslave]

Ask your accountant?

If you haven't got an accountant find one.

NorthernladUK Comment generator

I think the deafening silence is the experience of the community being voiced. Surely it is relevant if you have an accountant or not as you are asking a question that requires a professional accountant. One that knows your history, how much we are talking, how near thresholds you are, how much you already pay in to a pension etc which can help him give you an informed decision. I would have thought any answer based on the almost zero information you have provided will be as much use as guessing.

Stick it all in a pension and don't pay any tax on it. That is probably the most tax efficient manner as you will hit higher tax thresholds if you continue to divi it out to yourself. Could be a good time to liquidate the company and use the benefits with that to both take your cash out tax efficiently and then start another up for just yourself. You get 1% off FRS for a year so lots of lovely money to be made.

That's my best guesses.

These all still apply.

HTH

[cojak]

Wait until the accountants turn up tomorrow.