I finished my contract back in Dec 2015 and have since found a permanent role.
I own 50% of the shares in my company and my wife has the other 50%. I'm thinking of transferring all my shares to her as she does not work and I will be in the higher rate tax bracket with my new job. She can take 100% of the dividends going forwards and it will take a number of years before all the retained profits in my company will be depleted.
With the new £5k dividend allowance coming in tax year 2016/17, is this dividend extraction method still tax efficient? Or would I be better off closing down the company and claiming entrepreneurial relief?
I own 50% of the shares in my company and my wife has the other 50%. I'm thinking of transferring all my shares to her as she does not work and I will be in the higher rate tax bracket with my new job. She can take 100% of the dividends going forwards and it will take a number of years before all the retained profits in my company will be depleted.
With the new £5k dividend allowance coming in tax year 2016/17, is this dividend extraction method still tax efficient? Or would I be better off closing down the company and claiming entrepreneurial relief?
Comment