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Dividend when there is retained loss carried forward

Dividend when there is retained loss carried...

This seems a silly question but I haven't done tax or company accounts for quite some time.

Small one man ltd company with profit after tax of £25k for 2008. The 2007 retained LOSS was £9. I want to pay dividends of £22k. Would this be allowed as the 2008 profit is sufficient to cover the dividend, or would the dividends be limited to £25 less £9 = £16k?

Lindy Blignaut

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15th Oct 2008 09:14

Inc lude up to date position
You declare a final dividend based on the position in the accounts, i.e. the net. An interim dividend, if the articles allow, can be paid based on up to date management accounts. Be aware that if you pay more than you should it will be an unlawful dividend and HMRC will reclassify as a loan with BIKs and section 419.

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14th Oct 2008 09:07

Peter is right
Nothing more to be said

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14th Oct 2008 05:51

Present position is important
Lindy
You look at the balance of undistributed profits when you propose the dividend. This would involve looking at 2008 also.
PS. It would be better to be consistent in showing the "k"!

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