Dividends vs Salary- Ltd Comp Closing down

[johnsmith]

Hi guys,

Needed some advice.

Ltd Company Director. Company in Profits right now. As I'm planning to relocate abroad (for personal reasons) in 18-24 months, I was wondering which would be more beneficial

Company has a profit of around 25k after tax in the business account right now. from what i have been told, I have 2 options.

1. to take it out as dividends ( i won't be touching the Higher tax threshold)
2. Leave the money in the account and I could take it out as a one-off payment when I wind up the company( paying some tax!!!)

I'm expecting another 25k to be accumulated as profts in the next 12 -18 months, so at the end i would have approx 50 k in the bus. account when I close down the company

any help ot suggestions really appreciated

 

[elaine@cheapaccounting]

Go see an accountant and discuss entrepreneurs relief - detailed tax planning could save you a bob or two here but do seek specific advice.

Good luck with the move

 

[jim_price]

Very difficult to answer these sorts of questions without full knowledge of the company's and your own circumstances. On the face of it though, if payment of dividends spread across two tax years will not trigger a higher rate tax charge, then you probably don't need to worry about seeking capital treatment for a one off distribution at the end.