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Post Info TOPIC: new company registered ltd


Newbie

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new company registered ltd


Hi All, 

Hope I can get some sound advice.  My husband is retiring soon and I'm getting conflicting advice from accountants with regards to taxation and being limited.  If I give a quick overall view I wondered if I could get some sound advice?

We have opened a Ltd company recently and are using my husband's pension payout as a capital introduction to buy a property and we are going into property development.  The money will be owed back to us and will be close to £100k, we are both Director's and have controlling shares.  

 

My husband says that the pension payout is tax-free at 23%, he wants to take out the 25% but his employer is asking if he wants to pay the tax himself or whether they tax him and deducts it from his pension pay-out.  We asked our accountant and they didn't know what he was on about?  I get a little confused, as whilst I'm up of self-assessment taxation I would be presuming he could use this as tax already paid into the business and off-set it?  

We will not be taking any income from the company by dividends or wage as we are both paying tax and NI through employment/pension but, I wanted to clarify if we could "take back" our capital without any double taxation as it will just be a return of the capital introduced in the company.  We want to build up a lump sum by investment, employing and also re-investing into our community.  We have been told by the accountants we went to for advice that we can close the company and pay only 10% entrepreneur relief but, I always understood this was used if selling a business not closing one.  Could someone please clarify?  

Any help would be greatly appreciated.



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Master Book-keeper

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Hi Lisa
This site is actually for professional bookkeepers and accountants as opposed to business owners Im afraid, plus we are all in the middle of silly season January with most of this site's contributors meeting themselves coming backwards given it seems that most folk prefer to leave their tax returns to the last minute!  

Did you get any advice as to whether or not you went Ltd in the first instance?  Property development is a broad description, so exact nature of your business Im presuming was given to the advisor at the outset.   Im not sure who you have approached to give you the conflicting advice as generally  Accountants will not give advice which is specific to your cicrumstances without having an agreement in place.  Also Im not sure about the qualifications that your accountant or the person you have requested advice from has - frankly your Accountant not knowing what 'he was on about' is a little surprising in that they didnt then ask more questions to get to the nub of the enquiry, even if it then meant they had to go away and do some research if they are unable to answer your query straight away.   I would suggest you find someone who is either Chartered Certified (ACCA or ICAEW) or at the very least has some tax qualifications.

 

Edited for typo

 



-- Edited by Cheshire on Wednesday 4th of January 2017 07:23:55 PM

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Joanne  

 

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

 



Newbie

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Posts: 2
Date:

Hi, thanks for the response. The accountant I have been to has been in business over 60 years and is a partner. I used to work for said accountants, hence the reason why I was using them. I'm a qualified bookkeeper and as I say, understand the self assessment process but this ltd company process baffles me. Limited company wise it is to save taxation as we will not be taking any wage from the business so know we will be better off. It also helps us open accounts with suppliers too. Shall I wait until after the "January" rush has finished and maybe listen to some answers?

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Master Book-keeper

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There are far too many unknowns here and it certainly sounds like conversations with the Accountant(s) were confused, on both sides eg sounds like from the little you have put that they thought when you were to close the company you would still trade but through a partnership. Although this could have been advice for later on, its all unclear. Plus I would be concerned about your view of saving taxation via the limited company as you SEEM to be focussing on your personal tax, but have to remember that there will be taxable profits on which CT is paid. Plus the consideration as to how you extract those profits at some point in the future, whilst mitigating the tax needs to be looked at, so longer term tax planning is key and not really a question for this forum. There is plenty on the HMRC site about enterpreneurs relief that will give you a start, but other than that I would suggest you either re-approach your existing Accountant on a formal level to properly assess the WHOLE picture, or approach another suitably qualified Accountant.

__________________

Joanne  

 

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

 

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