Limited Company Profit Extraction

Background

Our client was 49 years old last year. He was the major shareholder of a successful firm, which he had run for over 15 years & earned a good living. Whilst the early years of the business were a struggle financially, he was now in the fortunate position of have accumulated significant cash reserves in the Company.

Client Concerns & Immediate Issues

• Substantial Cash in company bank account
• Would like to get company money out of the business
• With imminent retirement how best to ‘exit’ from the business

Our Initial Recommendations & Actions

• Carried out a review of his existing tax & financial arrangements
• Changed the Company shareholding to include family members & senior management
• Reviewed and recommending adjusting the method of remuneration – striking the balance between Salary, Dividend & Pension
• We received guidance from Tax, Legal & Accounting specialists regarding the potential loss of Entrepreneurs relief & co-ordinated the advice available 

The Results so far

• Removal of over £300,000 worth of Company reserves into the hands of our client & his family – with no immediate liability to tax
• Peace of mind – the capital is now in his hands; it is also sheltered from Inheritance Tax, Capital Gains Tax & protected from possible Company creditors
• Greater choice – the actions have enabled him to get one step closer to securing sufficient funds upon which he can retire – should he so wish.

Please Note: This document is provided as a working example and for information purposes only this should not be taken as financial or investment advice.