Share Premium account reduction
We are working with a firm of Solicitors who are advising our client on a Share Premium account reduction in order to create distributable reserves. In effect, a £100,000 share premium account is to be written down under new CA rules and credited directly to reserves. The client will then declare a pre year end dividend using those reserves.
My questions are:
1. Are there any general observations or warnings to be considered.
2. Is this tax neutral, ie. no effect for tax as direct to reserves.
3. What is the accounting entry / disclosure and is there any online guidance. I'm led to believe that the journal is simply debit share premium and credit direct to balance sheet reserves.
All help, guidance very much appreciated.
- CGT base cost 367 13
- Where has Portia gone? 8,817 143
- What does PITA mean? 548 13
- Late leaver notification 231 5
- Dividend and pension with no salary 271 4
- Accountex Exhibition 184 2
- Overseas Company 110 1
- You know you're an accountant when... 1,495 45
- Private use for Small hotel owner: historic rules 155 1
- Help with small charity CT600 please!! 198 1
- Vat on solicitors charges 242 5
- Career change - how to get relevant experience? 1,082 11
- A little bit of politics 496 6
- Could i ask for a bit of help please. 353 6
- Filling in my self assessment 719 14
- Should small companies be audited? 1,001 41
- Mileage claim restriction 383 3
- Self Assessment employed and self employed 184 1
- Overlap profit 580 15
- career 352 2
- Sanzar 456
- Digital marketing focus group 380
- Sage troubleshooting for employee who has previously claimed SMP 352
- Continuity Agreement 296
- Are commercial mortgage cashbacks subject to Corporation Tax ? 282
- Sainsbury's mangement 277
- Buyback 267
- Avanti Accounts 263
- Entrepreneurs' relief (ER) for EMI shares 203
- Iris and Miicrosoft 365 177