Taking a company dividend after retirement

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I am looking to retire due to ill health as a company director. I am the sole director and have built up a substantial bank balance. There are no other assets. The only liability is corporation tax due on accounts to 30/4/24 which will be paid shortly. My question is: Can I leave the company open and continue to take dividends annually from the company for about three years whilst not trading or should I withdraw all bank funds and pay income tax on the dividend and close the company.

Replies (6)

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By bettybobbymeggie
04th Jun 2024 15:30

An MVL may be another option but I'd think about paid for advice if I were you.

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By Tom+Cross
04th Jun 2024 15:34

Unfortunately, I would suggest that members of this forum are prevented, for a number of reasons, from providing you with the advice and direction, which you are seeking.
If you already have an accountant then it would be sensible, and respectful, to seek their opinions. If you don't have an accountant, given your circumstances, it would be sensible to source one.
In closing, I do hope that your health improves.

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By nrw2
04th Jun 2024 15:47

You should be able to continue to take dividends for a few years.

You may be able to wind the company up and receive the proceeds as capital rather than income (= lower tax, often) if the gross assets are modest - or an MVL may work if gross assets are higher.

Have a chat with your accountant.

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Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
04th Jun 2024 16:07

Have you spoken to your accountant about the prospect of a solvent Members Voluntary Liquidation ('MVL,) and the potential to claim tax relief on the distributions paid to you by the liquidator?

See here for more information:

https://youtu.be/svRwgIsFWR8?si=87R5aGtpTpkbeh6z

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By Joe Alderson
05th Jun 2024 10:02

The most tax efficient option may be to close the company, depending on other factors. You really should seek your accountants advice as they will know your current situation best and advise accordingly. One answer does not fit all.

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paddle steamer
By DJKL
05th Jun 2024 10:26

Remember continuing the company for three years may incur costs (prof fees)

A MVL will certainly incur fees but might be tidiest solution in short term rather than carrying on business,

Maybe in part pension contributions into say a SIPP by company would work re reducing CT, smoothing income in future, receiving 25% tax free and a little IHT planning- carry back terminal loss might be used if company still trading.

The only way to sort the options is with paid for, bespoke, professional advice.

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