Hi,
I am trying to get my head around the closed company surcharge for my Ltd company. I have gathered the following pieces of information:
I have an engineering ltd company and my questions are:
I am trying to get my head around the closed company surcharge for my Ltd company. I have gathered the following pieces of information:
Section 32 increases the threshold for application of the close company surcharge from €635 to €2,000 of undistributed investment and rental income. This threshold will also apply in calculating the surcharge on undistributed trading or professional income of certain service companies. This takes effect for accounting periods ending on or after 1 January 2013.
A close company surcharge of 20% of a company’s distributable rental and investment income is imposed if the company has not made a distribution of the relevant income within 18 months of the end of the accounting period.
If the close company is a professional services company e.g. an engineering company a surcharge of 15% may arise on half the distributable trading income of the company if a distribution is not made within the same time period.
I have an engineering ltd company and my questions are:
- Am I correct in understanding that if I leave any unallocated money (i.e. not paid in wages or expenses) in the company above the 2000 euro amount I will pay corporation tax on it and also a 'close company surcharge'?
- If I spend this money by the end of the next financial year will I avoid this surcharge?