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Taking large amounts of cash from LTD company

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    Taking large amounts of cash from LTD company

    Hi,

    I have a LTD company where I do the usual thing of paying myself a salary and taking dividends.

    I'm starting to get a small stockpile of cash and in a year or two, I'd ideally like to buy a house. What would be the most tax efficient way to get this money (around 150k) out of the company?

    Cheers, Ben

    #2
    Pay yourself dividends and then pay the necessary tax on the dividends. Paying half this year and half next year would incur less tax than paying the whole lot in one year, because you would get the benefit of tax allowances from both years.

    However, with an amount as large as 150k there will be a lot of tax either way. Pay it and don't listen to anyone offering you an illegal scheme.

    Comment


      #3
      Do you have any relatives you trust, could you make them shareholders and use them to pay out dividends, your spouse would be the first point of call, any children over 16?
      Originally posted by Stevie Wonder Boy
      I can't see any way to do it can you please advise?

      I want my account deleted and all of my information removed, I want to invoke my right to be forgotten.

      Comment


        #4
        Originally posted by SimonMac View Post
        Do you have any relatives you trust, could you make them shareholders and use them to pay out dividends, your spouse would be the first point of call, any children over 16?
        Isn't that income shifting?

        Comment


          #5
          Originally posted by stek View Post
          Isn't that income shifting?
          I thought if the class of shares were the same for each parties, same voting rights, same dividend rights it was allowed?

          Thus, as long as a spouse (or civil partner) is given ordinary shares (carrying the normal full range of rights), any dividends paid on the shares should be treated as their income and the settlements legislation would not apply.

          Many advisers prudently recommend that dividends paid to a spouse should be paid into their own separate bank account (as opposed to the couple’s joint account).
          http://www.taxation.co.uk/taxation/A.../324521/me-you
          Originally posted by Stevie Wonder Boy
          I can't see any way to do it can you please advise?

          I want my account deleted and all of my information removed, I want to invoke my right to be forgotten.

          Comment


            #6
            Originally posted by SimonMac View Post
            I thought if the class of shares were the same for each parties, same voting rights, same dividend rights it was allowed?
            Hope it is, whilst I've tuliploads in the company account, I am personally potless!

            And four kids over 18, I'm watching this one!

            Comment


              #7
              Originally posted by baj84 View Post
              Hi,

              I have a LTD company where I do the usual thing of paying myself a salary and taking dividends.

              I'm starting to get a small stockpile of cash and in a year or two, I'd ideally like to buy a house. What would be the most tax efficient way to get this money (around 150k) out of the company?

              Cheers, Ben
              This is why I never advocate leaving shedloads of money in your company. You should take out the tax efficient maximum every year, leaving enough in to cover tax payments and regular bills.
              I couldn't give two fornicators! Yes, really!

              Comment


                #8
                Originally posted by baj84 View Post
                Hi,

                I have a LTD company where I do the usual thing of paying myself a salary and taking dividends.

                I'm starting to get a small stockpile of cash and in a year or two, I'd ideally like to buy a house. What would be the most tax efficient way to get this money (around 150k) out of the company?

                Cheers, Ben
                When the time comes go permie for a bit and close the company using entrepreneurs relief to extract it paying just 10% tax
                merely at clientco for the entertainment

                Comment


                  #9
                  Originally posted by unixman View Post
                  Pay yourself dividends and then pay the necessary tax on the dividends. Paying half this year and half next year would incur less tax than paying the whole lot in one year, because you would get the benefit of tax allowances from both years.

                  However, with an amount as large as 150k there will be a lot of tax either way. Pay it and don't listen to anyone offering you an illegal scheme.
                  Pah. 150k. Thought this was about proper money. I'll pass.
                  What happens in General, stays in General.
                  You know what they say about assumptions!

                  Comment


                    #10
                    Originally posted by SimonMac View Post
                    I thought if the class of shares were the same for each parties, same voting rights, same dividend rights it was allowed?



                    http://www.taxation.co.uk/taxation/A.../324521/me-you
                    This is true, to a degree.

                    Having your spouse as a share holder is fine. Arctic Systems sorted that out. Having your (older) kids as shareholders I don't think has ever been tested when they are not actively involved in the company in the way most family owned firms are.

                    Beyond that I think HMRC will definitely want to talk to you about it if 3 or four more relatives suddenly become shareholders the week before a large divi is declared. Especially if tat cash then ends up back with you. That, to me, is moving from something reasonable to an artificial arrangement for the specific purpose of avoiding tax. And we all know what they think about those.

                    It also raises the question about how you managed it for the next divi where you don't want to have to give them the money. How do you manage that without it getting very messy?

                    IANAA, IANATL, IMNKWIATA. YHBW.
                    "Being nice costs nothing and sometimes gets you extra bacon" - Pondlife.

                    Comment

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