Slicing it

I have a client who has three sources of income. First consultancy services linked to housing through a limited company. This activity produces a net profit of about £100 000 a year.

He is the only director and shareholder of the company. He is also an equal partner with his wife in a butcher shop business which has lost money in recent years. For the tax year to 5 April 2010 my client’s share of the loss is expected to be £20 000.

Finally he receives an annual pension of £30 000 from a previous employer.

The challenge I have is that in the summer months he transferred £60 000 from the consultancy company to the partnership to enable it to pay its bills and keep trading. He also took £40 000 out of the company as a dividend (and no salary).

I have...