Use ISA savings account to pay dividends

[Wilmslow]

There is one way to avoid tax from the company account - pay it into a pension. Personally I have a good war chest and can access my pension in 8 years time, so that's what I am doing - it also mitigates corporation tax so a double benefit. If you don't plan on contracting for the long term closure taxes could be more beneficial - as others have said, get an accountant you trust and talk through the options that are best for you.

[jmo21]

Theoretically dividends paid in ISA account (up to 20k) are tax-free?

That is some ******* theory!

I am new with ISA accounts as well..

No tulip!

[OneManBand]

Holy tulip.

[Paralytic]

A stocks and shares ISA......
Sounds too good to be true....... It is https://www.contractoruk.com/forums/...hares-isa.html

Point me to an ISA provider that will let you buy shares in your own Ltd company.

Zeroc, all you need to do is to grow your company and have it listed on a recognised exchange, then you're set!

[dx4100]

Any money moving from your company to you will be taxed as income or as a dividend (obviously not including your personal allowances) - nothing can stop this (short of shutting down the company). There is no way of avoiding this.

ISA removes the tax you pay on interest you earn from money in your ISA up to the ISA limit.

You need an accountant. You also probably want to read up on the basics of financial management. Maybe spend some time on the Martin Lewis site or something.

[Lance]

I think he wants to place his company under an ISA and therefore benefit from the dividends.

if only..

A stocks and shares ISA......
Sounds too good to be true....... It is https://www.contractoruk.com/forums/...hares-isa.html

[ContractorBanking]

I think he wants to place his company under an ISA and therefore benefit from the dividends.

if only..

[sal]

Jesus wept...

Get an accountant, you desperately need one.

[northernladuk]

If you haven't got one, it would be a good idea to get an accountant.

[Paralytic]

Theoretically dividends paid in ISA account (up to 20k) are tax-free?

No, this is wrong, theoretically and in practice.

Interest or dividend earned from capital/shares in an ISA account are tax free, but you can't avoid paying the 7.5% dividend due from payments from your business by paying those dividends into an ISA account.

Not sure how you calculate the £1,419 figure either. Its 7.5% of neither £20K nor £18K.

[Zeroc]

Hello,

I have been contracting for a year and a half now and I have some money in my bussiness account I would like to pay as dividend.

I have been paying myself an annual salary of £8424 and haven't paid any dividend so far.

Checking the rates,we have a £2000 allowance and a 7.5% basic rate.

I am intending to pay £20000 in dividends , which means £1,419 of tax.

I was thinking about using an ISA account to pay dividends. Theoretically dividends paid in ISA account (up to 20k) are tax-free? Would it make any difference if I pay dividends to my personal account or to an ISA account?

It is the first time I pay dividenda and I am new with ISA accounts as well..

Many thanks