Cash extraction

F

Fairplay

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I'm a shareholder in private company that also has non exec shareholders. The company is doing well, thankfully, and I'm due to receive a substantial dividend in respect of this year. Apart from pensions, are there ways of mitigating or alleviating my personal tax on the dividends or are there effective alternatives to dividends?
 
Dividends are the least tax efficient as they are disallowable for the company and you pay tax at the marginal rate.

Better off with salary and pension, at least you get a CT deduction for them.

Can you charge in any management consultancy fees from a trade or another company? Does the company operate out of a premises owned by you - can you therefore charge/increase the Rent?

Is the dividend to avoid the close company surcharge? Is it a service company?

Good tax advice on this could save you a lot of money.
 
The most tax efficient way of extracting funds from a company is generally a liquidation where you should be able to obtain CGT treatment (and therefore pay tax at 25%).

Speak with a tax adviser (but don't let tax be the primary driver of any decision).
 
Thanks for the help. It is a close company and liquidating it is not an option. Wanted to make sure there was some scope before getting a tax adviser involved.
 
If feasible, you should perhaps discuss this with the company's accountant for some initial guidance before engaging a tax specialist.
 
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