Hi There,
I'm looking for advice.
I own my own small company and was wondering if I'm been tax efficient with my income from the company. Both my wife and I take a salary of 100k between us paying tax at the higher rate. We do not declare a dividend from the company currently.
I'm wondering if my thinking is correct so I'm open to any input out there. Here are my thoughts
If both myself and my wife decided to take a salary each that would bring us under the higher tax rate, say broadly speaking 25k each and then at the end of the year declare a dividend of 50k from the company would we end been more tax-efficient doing this? My understanding is that if we are both on the lower tax rate we would only pay 7.5% tax on the company dividends. Is this correct?
Kind Regards,
MikeM
I'm looking for advice.
I own my own small company and was wondering if I'm been tax efficient with my income from the company. Both my wife and I take a salary of 100k between us paying tax at the higher rate. We do not declare a dividend from the company currently.
I'm wondering if my thinking is correct so I'm open to any input out there. Here are my thoughts
If both myself and my wife decided to take a salary each that would bring us under the higher tax rate, say broadly speaking 25k each and then at the end of the year declare a dividend of 50k from the company would we end been more tax-efficient doing this? My understanding is that if we are both on the lower tax rate we would only pay 7.5% tax on the company dividends. Is this correct?
Kind Regards,
MikeM