Ltd Company declaring dividend

Palerider

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Folks.

I'm a 50% shareholder in a limited company, my co-director / partner retains the other 50% shareholding, this past year and a half have been particularily challenging, we both took a reduction in salary totalling 50% gross over the past 18 months.

Our year end is in December and with all our efforts at managing costs it appears we will make a modest profit, my question is can we pay dividends to the shareholders and if so what are the tax implications, I understand this may be better than drawing increased salary with respective tax and other implications. you will note the dividends will be paid to the co-directors i.e one and the same people ?

Ta in advance.
 
Dividends are taxable on the recipient at their marginal rate. (+PRSI/Levies)
Dividends are not deductible against Corporation Tax.
Taking as salary, is taxable at marginal rate but deductible against CT.
In the situation as you described, a dividend would not make sense to me. However you should ask your professional advisor / accountant / auditor as there may be other issues in your case which might alter that decision.
 
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