I am employed as a railway engineer and earn approx. £55k and a high rate tax payer.
I have recently set up two limited companies; me being the only director and shareholder. Each company has purchased a property and the properties are rented out to the council. So the only revenue received is rental income from the assets.
I have put director’s loans into both companies to pay for the deposits. Company 1 loan was £55k and company 2 was £120k
After expenses ect.... company 1 will make a yearend profit of around £5k and the company 2 around £8k. Year end is in July.
I am not paying my directors loan back to myself yet; so if I was to start paying this back to myself the company profits would drop. Shall I wait until I sell the properties (many year in the future) to pay this back or start paying it back now in instalments? What the most tax efficient?
I was planning on issuing all of these profits as dividends; then I presume I would have to pay the higher rate dividend tax on these when I put in my directors self-assessment.
Is this the best way to removing my profits? This is my first limited companies so any advice would be great.