Retained earnings/Dividends timing prior to tax year end

[Jessica@WhiteFieldTax]

I'm a little confused about the difference between an interim and final dividend (presume that this is a close company where the shareholders are the director and a spouse).

Does a final dividend actually have to be declared and paid or can the company just declare interim dividends?

They could all be interim, and, for practical purposes they tend to be so with smaller companies.

Its only a issue if there are external shareholders or you want to do a "wait and see" on the final accounts.

Key thing is interim dividend is deemed paid when directors approve it / pay it, whereas final dividend not until shareholders have approved it - that normally, but not always,. moves it into a different tax year.

[Wanderer]

Key thing is interim dividend is deemed paid when directors approve it / pay it, whereas final dividend not until shareholders have approved it - that normally, but not always,. moves it into a different tax year.

Ahh, it makes sense now. I guess that with our close companies the shareholders give the approval at the board meeting when the dividend is declared so it makes no odds if it's interim or final though I think I'll stick to interim to keep it simple. Thanks for your explanation.