Closing LTD company - Tax efficiently

[gary1703]

Hi

It looks like I am about to be offered a perm role so I am beginning to investigate the most tax efficient way to close the company and have seen a few different things regarding dividends and Capital gains tax but I was just wondering if someone had a very basic idea.

After all liabilities (apart from the accounting costs to close the company which I assume to be under £800) I will have approximately £23000 in the company. I guess I could take it all as a dividend payment which will be a 10% tax hit I assume but would capital gains be more efficient ?

Thanks in advance for any advice

Gary

[Alan @ BroomeAffinity]

Capital distribution I’d suggest. Wait till after 5/4 and pay £2k divi first. Then First £11k is exempt (assuming no other cg in the year.) the balance is taxed at 18% or 28% depending on your other income.

And in the words of NLUK why not ask your accountant? They’re more likely to know your personal situation than us.

[TheCyclingProgrammer]

Capital distribution I’d suggest. Wait till after 5/4 and pay £2k divi first. Then First £11k is exempt (assuming no other cg in the year.) the balance is taxed at 18% or 28% depending on your other income.

And in the words of NLUK why not ask your accountant? They’re more likely to know your personal situation than us.

Aren’t the CGT rates 10% and 20% depending on income?

Wouldn’t likely OP qualify for ER which would make the rate 10% anyway?

[Alan @ BroomeAffinity]

Aren’t the CGT rates 10% and 20% depending on income?

Wouldn’t likely OP qualify for ER which would make the rate 10% anyway?

Indeed. Quoted property rates there. Head’s up my @rse.

ER has too many what If’s around it to say with confidence whether it’d apply.

[craigy1874]

Indeed. Quoted property rates there. Head’s up my @rse.

ER has too many what If’s around it to say with confidence whether it’d apply.

Well on the basis that it is has been a trading company for the last year, the OP owns at least 5% of the shares and is an officer, I'd say it's pretty nailed on to qualify for ER.

[Maslins]

Well on the basis that it is has been a trading company for the last year, the OP owns at least 5% of the shares and is an officer, I'd say it's pretty nailed on to qualify for ER.

Yeah, ER tends to be fairly easy for contractors to qualify for. Where we see them fall foul tends to be:
1) company trading <1 year.
2) secondary shareholder isn't a director/company secretary.

[barrydidit]

Or you could make a pension contribution with the money - no personal tax would be due on that. Your co might be able to reclaim some CT next year, though I don't know about that. You could leave yourself a £2k dividend for payment in April too, as a nice little bonus

[gary1703]

Thanks all - I will go to my accountant but as the perm role isn't nailed on I haven't bothered yet. for some detail though I own 100% of shares and have been trading for around 20 months

[alanm]

likewise

I'm in the very same boat - possible going perm, but fear if i do the salary i earn in this tax year with my new employer will cause any dividents ai paymeny self from my ltd to be hit with a huge tax dividend due to me earning a largr salary. then don't forget the corporation tax to come later!

how did you get on , you made any decisions yet?

[Harrysp]

Bump