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A pot of gold?
A and B are directors and equal shareholders in a recently formed company which will trade in the service industry. The directors will each take a salary of £4,600 per year and dividends to keep their total individual income within the basic rate of tax.
A pot of gold?
A and B are directors and equal shareholders in a recently formed company which will trade in the service industry. The directors will each take a salary of £4,600 per year and dividends to keep their total individual income within the basic rate of tax.
The nature of the business is such that it will probably only trade for a maximum of about three years. At the end of this period it expects to have a cash balance of about £200,000, which would probably be held in a bank deposit account or similar. It would not be invested elsewhere outside the company. There are likely to be few other assets and these would certainly have a total value of below £5,000. The directors then propose to dissolve the company and take advantage of Extra-statutory Concession C16.
Is the cash retained in the business a problem? What are the consequences and can these be overcome?
Query T16,609
