Best way to withdraw cash from company?

susanm · Postby **susanm** » Fri Jun 13, 2008 7:22 am

I am a director of a ltd co (property investment) which makes a loss. There is 80K in the company's deposit account which I would like to take out of the company and invest elsewhere. Could someone advise if there would be any tax to pay on this withdrawal and if it is taxable can I choose to take it as salary or a dividend? If either, which would be best for me please?
Many thanks,
Philip

King_Maker · Postby **King_Maker** » Fri Jun 13, 2008 9:21 am

Dividends are only an option if you are a shareholder and the company has sufficient distributable reserves.

Otherwise, it would need to be a salary - with the appropriate tax and NI deductions.

[This assumes the company does not owe you any money from (say) mileage claims and other business expenses.]

taxattack · Postby **taxattack** » Fri Jun 13, 2008 10:22 am

Philip

You say the company makes a loss. Does the 80k represent the residue of profits of earlier years? In which case it is available to pay a dividend to the shareholders (not directors, unless they are the same persons).
Or monies which you put in as capital? In which case you can withdraw your own money, without tax.
Or, as King Maker says, as salary - usually the expensive option.
Regards
chris @ taxattack.co.uk