Paying dividends when and how.

[taxed_to_death]

I am looking for information on when I can pay myself a dividend as a director and shareholder of a Ltd Co.
Can I only pay a dividend from profits?
How often a year can I pay a dividend?
When can I pay a dividend, I am in my first year of trading and want to know if I can take advantage of my low income in the first year, as I have only paid myself £6000. My year end is 31st Mar.Thanks for any advice or good sources of info on this subject.

[demetris]

Dividends can be paid to shareholders in accordance to their number of shares out of accumulated distributable profits only after they have been taxed at corporation tax rates.

If you are a director/shareholder you can take dividends (interim) any time as long as there are available profits and the Board of Directors passes a voting (formal minutes of Board meeting must be kept). Also at the company AGM the sharehoders can approve final dividends proposed by the Board.

If the dividends you take in a tax year do not bring your total income within the higher rate of income tax, there will be no tax to pay on the dividends.

We have a Special Report on how to save tax that deals with this and other tax matters that affect small businesses, written in plain language, which we send to subscribers to our FREE weekly newsletters on tax and other business matters. Also, on our website we have a series of tax articles on small business topics including the one you are interested in. You are welcome to check them out.

Demetris Savva BA FCCA
http://www.tax-accounting-london.info
constantinesavva@accamail.com

[taxed_to_death]

thanks for that info...
I have seen a companies accounts recently where the dividends paid put them into loss, but the balance sheet showed +ve as they had substanial loan finance. Is this correct? Is it just an issue of what is profit and what isn't? I'm interested as this is my situation.