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Where Taxpayers and Advisers Meet

Help

Gregw79
Posts:1
Joined:Mon Dec 30, 2019 4:08 pm
Help

Postby Gregw79 » Mon Dec 30, 2019 4:29 pm

Just wondering if someone can advise on the most efficient way to pay myself.

We have a family business in which I hold a 20% share. There are two companies. I am a high rate tax payer in one of them and don’t take an income from the other. We don’t take dividends as the company doesn’t usually made a large profit and we tend to re-invest where we can.

I also have a personal flat which i let out and pay tax on the income.

I know dividends can be a tax efficient way of paying yourself but how does that work if the company isn’t making too much money and do the other directors have to take the same amount. Or is there any advantage in paying myself through the two companies rather than just the one?

Any advice would be appreciated.

Thanks.

Tom7000
Posts:74
Joined:Wed Aug 06, 2008 3:30 pm

Re: Help

Postby Tom7000 » Thu Jan 09, 2020 5:09 pm

Its probably a 45 minute discussion to plan this all out. Your accountant should help.

If the company doesn't make a profit well, there's no money to pay you... so being paid the best way doesnt become an issue.

Dividends cause lower deductions to HMRC than salary overall. But as a 20% shareholder they have to be paid proportional to shareholding. You could get other shareholders to waive them, but you need a lawyer to draft a waiver as its a deed.

But it depends on the sums and complexity involved.


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