Assuming I continue to work for the next fews years, and my LtdCo turns over £100k p.a. then I will pay myself a 10K salary. After other expenses, then CT, there should be about £67k profits p.a.
I can draw ~ £30k before higher rate tax (making my personal net income ~ 39k)
That will leave ~ 37k left in LtdCo each year. I could issue further dividends, and lose 22.5% of this to personal tax. So I would see ~ 28k net.
I coudl pay capital off my mortgage balance. Or put £7200 into an ISA and the remaining ~21k into the mortgage.
The ISA option would possibly yield about 6% p.a. tax free interest (at current rates).
Assuming my mortgage is also @ 6%, the advantage of paying into the ISA or reducing the mortgage balance would be comparable.
Alternatively, I could pay directly from my LtdCo into a pension fund (with the obvious restriction that I cannot then access this money until I retire @ 55-65 - unless I emigrate and take my pension "pot" with me).
The advantage of this is that LtdCo tax bill reduces by ~2k, and so the profits available for dividends are reduced by ~8k but there is 10k in the pension fund.
I guess the pension contributions could be the most tax effective route, since it would still allow me to draw some "excess" divs from the company to pay into an ISA and off the mortgage, whilst having a pot that I can't access and spunk on a lamborghini when I have my eventual mid-life crisis.
Anyone got any other decent ideas about providing for later life, whilst still having a reasonable life now? I know the arguments for BTL and also for keeping money in the company to draw on (much) later. Any other efficient ways of saving/investing that other people on here use?
I can draw ~ £30k before higher rate tax (making my personal net income ~ 39k)
That will leave ~ 37k left in LtdCo each year. I could issue further dividends, and lose 22.5% of this to personal tax. So I would see ~ 28k net.
I coudl pay capital off my mortgage balance. Or put £7200 into an ISA and the remaining ~21k into the mortgage.
The ISA option would possibly yield about 6% p.a. tax free interest (at current rates).
Assuming my mortgage is also @ 6%, the advantage of paying into the ISA or reducing the mortgage balance would be comparable.
Alternatively, I could pay directly from my LtdCo into a pension fund (with the obvious restriction that I cannot then access this money until I retire @ 55-65 - unless I emigrate and take my pension "pot" with me).
The advantage of this is that LtdCo tax bill reduces by ~2k, and so the profits available for dividends are reduced by ~8k but there is 10k in the pension fund.
I guess the pension contributions could be the most tax effective route, since it would still allow me to draw some "excess" divs from the company to pay into an ISA and off the mortgage, whilst having a pot that I can't access and spunk on a lamborghini when I have my eventual mid-life crisis.
Anyone got any other decent ideas about providing for later life, whilst still having a reasonable life now? I know the arguments for BTL and also for keeping money in the company to draw on (much) later. Any other efficient ways of saving/investing that other people on here use?
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