shareholder tax on company money

R

rayk150

Guest
I have a company that has no assets at all except a 2006 Van, no loans (last loan/lease cleared 2 months ago for van), the company owes me personally a €70,000 loan I gave to start it still, I have not taken a salary from the company in 2 years either, i own 75% of shares and my dad the other 25% of the shares, I have recently made one transaction with the company, the company has €400K in the bank, my question is how do I get the money back out of the company as legal and tax efficient as possible, I understand the repayment of €70,000 loan is tax free and how is the rest taxed, is it a dividend or is income tax paid on the money left?, what will be left of the 400K
I will close the company I think as I do not use it, is it better this way to get the money out or should I just kept the company (I have other companies) or is some other way better to get the cash out as tax efficent as possible?
 
The bank account of €400,000 is surely an asset?
Repay yourself the loan, close down the company, the relevant tax would be Capital Gains Tax, for you and your father. Depending on your age and time you were direcctors, there could be retirement relief available for the entire amount.There is a lifetime upper limit, which could be exceeded if you are closing other companies in the future. In that case any relief given now could be clawed back.
CGT is now 25%, which is a lower rate than you would pay on a salary from the company, or dividend.
I'm wondering if your other companies are connected as a group whether you could pay a dividend from one to the other without Withholding Tax, but then you would still want to get the cash out somehow.
 
The options are:
1. Dispose of vehicle at tax written down value, net this against the loan, repay the balance of the loan, distribute it as salary / dividends and pay tax at your marginal rate. Then when the company has ceased trading and has no assets or liabilities, strike it off.
2. Liquidate it and pay tax at 25% on the surplus cash.

With the limited facts of the case, even though the fees are higher, the overall tax saving make option 2 more cost effective.

Patrick