Closing company, how to declare retained profits when filing personal taxes

[lysergic]

Guys,

last year (2010) I closed down my limited company and cashed in the retained profits.

Now I have to file my taxes and I was wondering if the retained profits should be considered dividends or whether there is anything else I need to do about it.

The money transfer hit my account in the 2010 tax year.

Cheers,

//lys

[Clare@InTouch]

How were they declared in the final closure accounts? Were they split between Dividends and Capital Distribution, or just Dividends?

[Nixon Williams]

You have not provided a great deal of information but here goes...

By '2010 tax year' - do you mean the tax year ending 05/04/10? If so, then this tax return was due with HMRC by 31/01/11 so it is probably late.

Any dividends should be recorded on the tax return in the year that they relate to, remember that the tax year starts on the 6th April and ends on the following 5th April of each year.

How did you close the company? If you closed it using the ESC C16 route then the proceeds on closure would be shown on the Capital Gains Tax section of the tax return.

If you did not close it by this method, then the distribution would probably be classed as a dividend and so recorded as such.

What did your accountant suggest?

Alan

[northernladuk]

Sorry for the rant but why do people shut down companies and start throwing bucket loads of money without actually knowing what they are doing??? It's just beyond me.

Anyway, sorry, rant over...

Technically they can't be dividends as you don't have a dividend voucher therefore would be illegal and counted as PAYE.