Tax liability

[MPR]

Hi, I have the potential for a large personal tax liability in this years accounts (due to personal circumstance, needed to take the money out of the company). I'm not sure if there is any way that I can reduce this e.g. dividends for spouse etc - any advice?
NB my husband is a director of his own small retail (limited) company from which he draws a small salary and no dividends

[Ticktock]

Hi, I have the potential for a large personal tax liability in this years accounts (due to personal circumstance, needed to take the money out of the company). I'm not sure if there is any way that I can reduce this e.g. dividends for spouse etc - any advice?
NB my husband is a director of his own small retail (limited) company from which he draws a small salary and no dividends

What did your and his accountants say?


IBNLUK

[Clare@InTouch]

It's a bit late to do anything now as dividends and share transfers cannot be backdated. You could pay into a pension personally, or make a few charity donations, as that would increase your basic rate band and mean higher rates kick in later.

Talk to your accountant and see if they have any suggestions, as it's hard to advise without knowing values and details on the rest of your financial information.

[Martin at NixonWilliams]

Hi, I have the potential for a large personal tax liability in this years accounts (due to personal circumstance, needed to take the money out of the company). I'm not sure if there is any way that I can reduce this e.g. dividends for spouse etc - any advice?
NB my husband is a director of his own small retail (limited) company from which he draws a small salary and no dividends

It is not clear whether you have the potential tax bill based on your withdrawals for 2013/14, or whether you have taken the funds since 6th April 14? You have more options if the latter.

In any case, based on the information above a share transfer to your husband would clearly benefit you. Speak to your accountant for advice on this sooner rather than later to avoid any unnecessary tax liabilities.

I hope this helps.

Martin

[Jeremiah@RHJAccountants]

As others have said it would be best to speak to your accountant as they will no your personal and business circumstances and be best placed to advise you.

[pkm]

Hi, I have the potential for a large personal tax liability in this years accounts (due to personal circumstance, needed to take the money out of the company). I'm not sure if there is any way that I can reduce this e.g. dividends for spouse etc - any advice?
NB my husband is a director of his own small retail (limited) company from which he draws a small salary and no dividends

I'm assuming you are referring to tax bill for 2014-2015 which you will pay in 2015. When I was contracting, I invested in VCTs and Pensions. But of course that depends if you have the money to invest. In those days, VCT tax relief was 40%. But it is not for the faint hearted. One VCT (Amati) has been outstanding - paying me dividends after dividends. The other option is SIPP pensions where you get tax relief but not as much as VCT.

Is your spouse a shareholder in your company and actively contributes to the business? Or are you planning to make your spouse a shareholder to distribute further dividends? Judging from your post, you seem to have already paid yourself as director. If you have, you will be liable for personal tax depending upon what you will earn during the year. Or don't take any more dividends for rest of the year and leave it in the company. Invest in VCT/Pensions to save some tax.

Just my two cents. I'm not an expert. There are many qualified accountants in this forum who can offer valuable insights.

PS: If you are referring to financial year just gone 2013-2014 then there is not much you can do. Pay the tax bill. You should've thought about it before the close of financial year.