Share this content

Remortgage on Company Rental Property

Proceeds of Remortgage taken by Directors

Didn't find your answer?

Company Purchases a property in 2004 for 160,000. 60K deposit from Directors and 100K Mortgage

No Rental income has been received till 2018

Property was remortgaged between these dates resulting in a Payment to the company of £100,000

Am i right to assume that if the Directors have taken this money out of the company even though it wasn't trading then it needs to be classed as Dividends?

Replies (5)

Please login or register to join the discussion.

By zarar
28th Feb 2019 01:07

What has the client told you it relates to?

Have they got loan accounts they can draw down?

Are they aware of the implications of an overdrawn loan account?

Are there enough reserves for them to be able to draw dividends?

Thanks (0)
Replying to zarar:
By Accountant A
28th Feb 2019 10:32


What has the client told you it relates to?

I think you know that there is no client!!

Thanks (1)
By johngroganjga
28th Feb 2019 08:04

How is the withdrawal shown in the accounts?

You say that the directors lent the company £60,000 in 2004 to buy the property, and that the company has had no income since then until 2018 to repay the mortgage with, so presumably the directors have been putting more money in to enable it to do so.

So isn’t the recent withdrawal mostly, if not entirely, a repayment of the directors’ loans?

Thanks (0)
By Tax Dragon
28th Feb 2019 08:36


Am i right to assume...

It doesn't matter what words follow this. The answer is no.

Thanks (1)
By lionofludesch
28th Feb 2019 09:17

If I had to assume something, it wouldn't be dividends.

There's nothing in this question which suggests that it might be.

Thanks (0)
Share this content