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Cash withdrawal

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01 February 2011
Issue: 4290 / Categories: Forum & Feedback , Income Tax
A director and property owner wishes to withdraw £250,000 from his businesses, but which is the most tax-efficient method?

Our client of retirement age has a 25% shareholding in a trading company that pays him a small salary and dividends that are limited to restrict income to basic rate tax.

He also has retirement annuity income and a state retirement pension. The company’s profits which generate substantial surplus cash are approximately £300 000 for corporation tax purposes.

In addition our client and the three shareholders of the above company are in a partnership that owns the premises from which the company trades and also generates trading profits from the storage and parking of commercial vehicles.

The premises would have a value of approximately £500 000.

The client wishes to remove £250 000 from the two business activities in a tax-efficient manner.

How can this be achieved as he does not have a director’s loan account with the company?

I would very much appreciate readers’ thoughts here.

Query...

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