Paying dividends in assets?

[TommyGG]

Hello,

We invested a lot of money in Bitcoin 6 months ago. It's now worth quite a lot.

We could sell them and pay capital gains on them and deposit the money into the business account.

But we were wondering if it's possible to pay a dividend out in Bitcoin. My co director wants to sell some of them, I want to keep them. So I was wondering if a good resolution would be to split them all up to respective shareholders.

Or is this illegal? Or tax inefficient? My understanding is that a sale of Bitcoin is capital gains.

Thanks for any advice

 

[UK Contractor Accountant]

Yes you can distribute assets to shareholders as a dividend in specie.

 

[ForbesWatson]

Hi
We are a firm of Accountants based in Lytham but acting for clients all across the UK.
If the Bitcoin shares are held by the Company and not in your individual names then there is no capital gains tax to pay on sale. The Company will pay corporation tax, and have the benefit of indexation allowance.

If the shares are held in your own names then they aren't assets of the Company and therefore can't be given as dividends.

I hope this makes sense.

Feel free to contact us for more advice.

Simon
Forbes Watson