How to get money out of Ltd to buy a house?

[Skag]

Say I have my own ltd, and in 5 years time I have managed to have a surplus of 500k and want to buy a house.
The company has been paying me my salary as usual, keeping in the area of 45k, plus my business expenses, pension etc. For argument's sake, say I never drew anymore dividends.

Is there an efficient way to avoid incurring dividend tax, or is this the only way to get the money out of the Ltd? (which pretty much equates a normal paycheck from a tax point of view).

[MrButton]

Entrepreneurs Relief (IIRC 10% but has restrictions). Or just pay 32.5% on the lump.

[TheCyclingProgrammer]

The only options are:

1. Take dividends and pay the tax.
2. Liquidate, claim ER and pay 10% CGT and not work for two years (or possibly through an umbrella).

Also think about pension contributions if you’re turning over a regular decent turnover.

[northernladuk]

500k profit in 5 years???

[Skag]

Got it. Thanks.

[Skag]

500k profit in 5 years???

Yeah, I just pulled a random figure that goes with the London house market

[TheFaQQer]

500k profit in 5 years???

I know - INKSPE.

[Hobosapien]

Yeah, I just pulled a random figure that goes with the London house market

Move somewhere cheaper where the cost can be absorbed without needing divis or a move into the higher tax bracket.

Alternatively, use a mortgage, possibly one with a 10 year fixed rate so you have a known cost to repay over that time and can ensure you remain under the higher rate tax threshold as you pay it back. Looks like a typical 10 year fixed rate is currently around 2.5%, a lot less than the divi tax or higher rate tax bracket. Just because you have potential access to the cash (you do have to be working to earn the stash) doesn't mean you shouldn't use whatever financial tools are available to those that have no choice but to be indebted.

Other alternative is to buy it via your company as a BTL.

[Eirikur]

The only options are:

1. Take dividends and pay the tax.
2. Liquidate, claim ER and pay 10% CGT and not work for two years (or possibly through an umbrella).

Also think about pension contributions if you’re turning over a regular decent turnover.

Variant on #1. take half this tax year and half next tax year saves a little bit on the amount of tax you need to pay, or better spread it over more tax years if you can wait

[craigy1874]

Also while keeping an eye your overall income doesn't exceed £100k or £150k.