If you're not going to end up with low years, you're going to have to take it out eventually.
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Drawing dividends over higher tax threshold - should I?
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Originally posted by MaryPoppinsI'd still not breastfeed a naziOriginally posted by vetranUrine is quite nourishing -
Don't forget that if you take a big divi this year resulting in a big tax liability you will have to pay that liability + 50% in January next year for your "Payment on account"."See, you think I give a tulip. Wrong. In fact, while you talk, I'm thinking; How can I give less of a tulip? That's why I look interested."Comment
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Originally posted by Moscow Mule View PostDon't forget that if you take a big divi this year resulting in a big tax liability you will have to pay that liability + 50% in January next year for your "Payment on account".Comment
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Originally posted by d000hg View PostIf you're not going to end up with low years, you're going to have to take it out eventually.Contracting: more of the money, less of the sh1tComment
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I keep a lump sum in the business account as a war chest but take everything else out. It's painful taking a 40% hit but I am young and figure I have another 15 years of this. So I can leave it in the account earning nothing for 15 years then drip feed it out when I am probably earning less, or take it out and earn say 5% a year, so over 15 years that will earn me more than the tax I will pay now.Last edited by JoJoGabor; 17 January 2012, 08:41.Comment
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Originally posted by JoJoGabor View PostI keep a lump sum in the business account as a war chest but take everything else out. It's painful taking a 40% hit but I am young and figure I have another 15 years of this. So I can leave it in the account earning nothing for 15 years then drip feed it out when I am probably earning less, or take it out and earn say 5% a year, so over 15 years that will earn me more than the tax I will pay now.Comment
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Originally posted by Bug View PostThanks, all - I appreciate your responses.
I'm lucky enough to have just secured a role for the next 12 months, again at a reasonable daily rate, so, if I left the net profit in the company, I'm likely to end up with a decent war chest by the end of FY 12/13. As I see it, this war chest only becomes useful if I become ill, cannot get employment after FY12/13 or cannot work for any other reason. It seems there are three options: pension; war chest; or dividend - and, with a mortgage to pay off, I'm really tempted to take a lump sum, take the tax hit and pay off the mortgage this year.
I'll dwell further, and change my mind a hundred times no doubt! Thank you - further advice well received here!
Do you currently split dividends with wife/partner? For some people, this is worth doing (depending on wifes current income) because it means you can arrange it to pay dividends up to the tax bracket for both of you.
For instance, example :-
50/50 share split.
You salary = £7000
Mrs salary = £10000 (from her own job for example)
OK. So upper limit is approx £44K.
In this example, apart from paying yourself £7K you could draw another £68K out of the company in dividends (£34K) with neither of you exceeding the tax bracket.
Of course, assumes you trust your mrs and she aint gonna knob the milkman and disappear with your £34K.Rhyddid i lofnod psychocandy!!!!Comment
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Originally posted by kingcook View PostOr retire earlyOriginally posted by MaryPoppinsI'd still not breastfeed a naziOriginally posted by vetranUrine is quite nourishingComment
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You could take the divs without a salary - but you may as well stay employed and tax the 7K tax free.
Unless that affects other tax calulations due to pensions etc. Unfortunately I've neither the reserves nor the chance to pack this in to have given it much thought...
so this is a bit of a non-post then...Comment
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Originally posted by Notascooby View Postso this is a bit of a non-post then...'CUK forum personality of 2011 - Winner - Yes really!!!!Comment
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