dividends..... again.............. please help

dividends..... again.............. please help

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ltd company ceased to trade dec05. accounts to be made up to 31 may06. money in bank drawn out after 5 april by sole director (shareholder). dividend intention originally,to avoid higher rate tax......is this the best way. (profits under 10k). tax implications in company?

catherine hammond

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DougScott
By Dougscott
06th Aug 2006 11:30

Not enough info
There is not enough info to advise but remember that the tax calculations cover the trading period so you must apportion the tax-free band proportionately to the length of the trading period. From the limited facts you have given then I would be inclined to treat the final distribution as a capital distribution under ESC C16 however you need HMRC clearance to do so. If you don't know what to do I would seriously consider finding an accountant who does know what to do!

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By AnonymousUser
07th Aug 2006 14:47

I don't disagree ...
.. but if we are only talking about £10k and provided there would definitely be no HR tax on a dividend in 2006/07 then there won't be any tax to pay. As you can't improve on that there may be no point in going down the ESC C16 route. If the intention was to pay as a dividend before 5 April 2006 well obviously you can't do that at this stage.

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