Hi Brendan,Hi Aladdin
Why does the company have so much cash? Have you considered taking the tax hit and having the cash in your hand?
People come up with all sorts of complicated strategies about leaving profits in the company to avail of Retirement Relief but they don't have the use of the cash when they need it personally.
Brendan
I don't want to have to pay the higher rate of tax on it as salary,
Possibly 3 times as there is also a BIK issue for as long as the loan remains outstanding.Unless you are going to pull some genie out of the bottle, you will be taxed twice instead of once.
So you pay Corporation Tax on the profits instead?
And then when you eventually take it out you pay Income Tax or CGT on the net amount after CT.
So you pay Corporation Tax on the profits instead?
And then when you eventually take it out you pay Income Tax or CGT on the net amount after CT.
Unless you are going to pull some genie out of the bottle, you will be taxed twice instead of once.
Brendan
Except company cash on hand and profit are not the same thing. His company could be loss-making yet still cash rich.
By magic!!!How can a company accumulate cash if it loses more money than it earns?
Once on paper expenses outweigh sales?How can a company accumulate cash if it loses more money than it earns?
In that scenario it will burn cash, not accumulate it?Once on paper expenses outweigh sales?
Specifically re tax, it's subject to BIK.
Preferential loans
A preferential loan is a loan made by you to your employee or former employee, or their spouse.www.revenue.ie
Edit to add, since you're a director, the company must also pay 25% of the loan amount as corporation tax, but this can be claimed back if the loan is repaid fully within 4 years.
Myself and grammar weren't getting along that day!Do you have any more info in relation to the 4-year time limit here? I'm not aware that there is a time limit on repaying the loan to get the tax back
Because the accountant tends to go off on a long rigmarole so I knew I'd get a straight answer here!By magic!!!
The OP seemingly was 'advised' to accumulate funds in the company, but was 'sketchy' on details 2 years ago.
Why they don't ask the same accountant that provided that advice re taking loan from company is puzzling though.
What should we do with secondary limited company income?
Age: 32 Spouse’s/Partner's age: 31 Annual gross income from employment or profession: 70,000 (+ limited company income started March 2021 gross 3500 pm but erratic, not counted in take home pay as wish to build up first) Annual gross income of spouse: 38,000 (due to drop to 0 in September...www.askaboutmoney.com
The rigmarole is the important bit you pay them for.Because the accountant tends to go off on a long rigmarole
The rigmarole is the important bit you pay them for.
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