Hi, just wondering if anyone can give me some advice. I have a client with a Limited Company, year end is 31st July 2017. The client is the sole director and shareholder of the company. I am in the process of doing the accounts for the Ltd Co and also her personal tax return for 16/17. She has declared dividends for that year of £20,000 and after a conversation with her about her tax return it seems the reason for doing this is to make her income look better as she intends to apply for a mortgage soon. I can see that the company does have sufficient retained profits to pay that dividend. On the other hand the company owed her around £25k when looking at her directors loan a/c (this is without the dividend included). The dividends have not yet been paid so that will take the loan up to £45k . My questions is can the dividend still be declared? I know it sounds silly but I am wondering if the company will ever pay back the loan and the dividend . What if she gets her mortgage and defaults on the payment they may question the dividends in the tax return?