Extracting funds from limited company

Extracting funds from limited company

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I'd just like to know how people would advise a client on taking 100k out of the business. How could it be taken in the most tax efficient way?

I'm asking the question because I'm curious to compare it against the real life advice that has been given. I'm not a tax adviser and I'm not advising anyone, this is purely professional curiosity. The person in question has no other income and the company can more than cover any dividends. 

Replies (3)

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By johngroganjga
15th Jul 2014 08:42

Dividends - unless it can be done as a return of capital subject to CGT at entrepreneur's relief rates, which would be cheaper.

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By bajones
15th Jul 2014 09:08

It depends..

It depends on the client's goals.

If the cash is not needed, then pension contributions are very tax efficient, but don't forget the need for relevant earnings. 

The client could receive a gross salary of £50k plus £50k into their pension. 

Not much of the £100k "in the pocket" but efficient extraction from the company.

 

 

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By Sandnickel
15th Jul 2014 13:54

Thanks for the replies.

The person in question wants 100k so the pension option is not viable, but thanks for your reply.

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