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Loaning money to yourself to avoid paying out dividends

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    Loaning money to yourself to avoid paying out dividends

    This year has been a big one in terms of spending and I do not anticipate the next year to be the same. I am short of 25k roughly which my company has in the bank but anything I pay out will be taxed at 32.5% now so it is a bit painful.

    Can I take out a 25k (12.5k myself & wife who is NOT a director but is 50/50 in the company) directors loan in March (want to fill up the ISA before the allowance expires) and come 6th of April release 25k in dividends and pay it all back? Obviously I know there will be some interest incurred here but is this legit? Yes I will ask my accountant..

    #2
    Originally posted by cannon999 View Post
    This year has been a big one in terms of spending and I do not anticipate the next year to be the same. I am short of 25k roughly which my company has in the bank but anything I pay out will be taxed at 32.5% now so it is a bit painful.

    Can I take out a 25k (12.5k myself & wife who is NOT a director but is 50/50 in the company) directors loan in March (want to fill up the ISA before the allowance expires) and come 6th of April release 25k in dividends and pay it all back? Obviously I know there will be some interest incurred here but is this legit? Yes I will ask my accountant..
    Not for your wife.
    merely at clientco for the entertainment

    Comment


      #3
      Can you give your non director wife a directors loan... Hmm.. Lemme think about that one...
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #4
        You say you are "short" of money, but then you say it's to put into an ISA, so it's not that you're short, you're just trying to reduce your taxes.
        …Maybe we ain’t that young anymore

        Comment


          #5
          Originally posted by WTFH View Post
          You say you are "short" of money, but then you say it's to put into an ISA, so it's not that you're short, you're just trying to reduce your taxes.
          Well... duh?

          Comment


            #6
            yes to you. not your wife. Not that it matters either way as director loans don't attract personal taxation.

            Why though???? You're not going to get a cash ISA that pays the 2.5% you need to pay for the loan.
            And what happens this time next year when you're run out of personal cash again.


            Stop pissing about with tax wheezes. You're gaining nothing here.
            See You Next Tuesday

            Comment


              #7
              Originally posted by Lance View Post
              yes to you. not your wife. Not that it matters either way as director loans don't attract personal taxation.

              Why though???? You're not going to get a cash ISA that pays the 2.5% you need to pay for the loan.
              And what happens this time next year when you're run out of personal cash again.


              Stop pissing about with tax wheezes. You're gaining nothing here.
              It's not about the % it's about the fact that ISA allowance renews in April so I want to make sure that I have used up this year's allowance.

              Well hopefully next year I will be more sensible with spending...

              Comment


                #8
                Is there a reason you can't make your wife a director?

                Comment


                  #9
                  Originally posted by pr1 View Post
                  Is there a reason you can't make your wife a director?
                  no reason at all.
                  It makes no difference for the scenario described. So the correct question would be "Why do you WANT to make your wife a director?"
                  See You Next Tuesday

                  Comment


                    #10
                    Originally posted by Lance View Post

                    no reason at all.
                    It makes no difference for the scenario described. So the correct question would be "Why do you WANT to make your wife a director?"
                    Well you and eek both said "not for your wife", so her being a director would make a difference

                    Comment

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