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Wizard of Oz

31 March 2009
Issue: 4200 / Categories: Forum & Feedback , Income Tax
An engineer sets up a UK limited company, which will carry on a business in Australia. The client has moved to Australia and has some sources of income in the UK. He also has an overdrawn loan account with the company

My client is an engineer and has apparently come up with a wonderful idea that is going to make him lots of money in Australia.

He has some UK pension income and he has let out his house in the UK and gone to live in Australia.

However before leaving the UK he set up a UK limited company which will carry on the business. He also managed to persuade his bank to lend the company £150 000.

The client has just arranged for the records for the first accounting period to be sent to me.

I see that the company has spent about £10 000 on legal bills which I suspect are related to securing rights to a product etc. and I will of course check this.

I also see that the director has withdrawn amounts – at about £5 000 per time – from the...

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