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.
- Guaranteed rents - which is the turnover? 127 3
- flat rate scheme 1,927 38
- Time to react ? ? ? 277 2
- which accounts package for busy hairdressers? 131 1
- How much would you charge for an interim audit? 638 9
- Anyone else experiencing issues with sage 50 payroll 154 3
- Company Share Buy Back 139 2
- Charitable Payment 210 4
- Are any of you members of The Institute of Financial Accountants - Accountnats certificate 939 15
- Unpaid share capital 258 3
- Company car in the LLP 197 2
- Physiotherapy 345 4
- New build property to be rented 189 4
- Are you going to Tick and Bash on 21 May? 1,886 52
- Hello 362 2
- Sage 200 question 127 1
- Spanish Assets taxation - UK Residence 121 2
- Ltd Co and Fully Paid Shares 200 5
- RTI and Advances to Employees 200 3
- Sorry - another PPR question 232 4