Ltd company: dividends tax implications

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
<BR>Hi<BR><BR>Just wondering if someone could shed some light for me on this subject....<BR><BR>Is it legitimate for someone to set-up a ltd company, whilst being the only shareholder and paying themselves a minimal salary.... but taking their *real* earnings as dividends, to take advantage of the dividends tax percentages as opposed to being taxed on the employment income bands? <BR><BR>Hope this makes sense...any ideas?<BR><BR>Ben <BR><BR>

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Ltd company: dividends tax implications

    There is nothing to stop them doing this however there is a new rule. If profits before dividends are between £10,000 and £50,000 any non corporate dividends are taxed at 19% with the balance of the profits taxed at 19% less marginal relief.<BR><BR>It is still likely to be cheqper tax wise to do this but it will cost the company more than it did this time last year!<BR><BR>Annette
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Ltd company: dividends tax implications

    <BR>Thanks Annette, that clears that up!

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