dividends limited company

[federusa]

I am a civil engineer operating my limited company

yearly I invoice for 75000£ +VAT (approx)

My expenses are approx 25000£/year.If I only paid myself a 6000£/year, there will be a 44000£ profit left.

I want to know if I can hold dividend for a few years and then invest in e.g properties.

Is it possible (and legal). Do I paid any tax on it while I hold the dividends?

Many regards,

[elainec100@cheapaccounting]

Corporation tax is paid on the profit (income minus costs) each year. Profit after tax can be held in the company without distributing as a dividend.

I would strongly suggested discussing the best way to invest in property with your accountant i.e. through your business or as a personal investment.

[Maslins]

You probably wouldn't want to invest in property through your Limited Company. Tax on capital gains are typically much higher than they are for individuals.

You'll probably be better off paying dividends, at least up to the higher rate band and investing personally. You don't have to pay out all profits as dividends, it's perfectly fine to leave some in the company to perhaps pay out at a later date when your income is lower for example.