New dividend rules SME

[Wangler]

Hi - assuming sufficient distributable reserves, can a director/sole shareholder lend his company money in order to pay out a dividend if the company doesn't have enough cash? Could be useful way of getting a divi into this tax year.

Thanks

[jpcentral]

The company declares the dividend and the director asks for it to be credited to his/her Director Loan Account. The money doesn't actually have to be taken.

[Wangler]

Many thanks John, very helpful. Wasn't aware of that as a method. I guess quite a lot of people will do this so long as it doesn't push them into higher rates.