From my accountant:
Does anyone know what this means? Is it better to have a lot of dividends in 2004 even if it means going into the 40% tax bracket. Should one have a miniscule salary and a lot of dividends before April 1st and then a larger salary and no dividends after April 1st?
With regard to the extraction of dividends from the company, I should inform
you that the regulations did change from April 2004. In this connection the
company must pay 19% corporation tax on all profits which are paid as
dividends drawn after 1st April 2004. You may wish to ensure that very large
drawings of dividends which extinguish the retained reserves brought forward
are extracted prior to 1st April 2004 as this can then be paid under the old
regulations without incurring any further tax charge. The maximum tax that
will be paid by the company will amount to 19%.
you that the regulations did change from April 2004. In this connection the
company must pay 19% corporation tax on all profits which are paid as
dividends drawn after 1st April 2004. You may wish to ensure that very large
drawings of dividends which extinguish the retained reserves brought forward
are extracted prior to 1st April 2004 as this can then be paid under the old
regulations without incurring any further tax charge. The maximum tax that
will be paid by the company will amount to 19%.
Does anyone know what this means? Is it better to have a lot of dividends in 2004 even if it means going into the 40% tax bracket. Should one have a miniscule salary and a lot of dividends before April 1st and then a larger salary and no dividends after April 1st?
Comment