How to pay only 20% tax on a £100,000 income

[Deleted User]

All legal of course:)

http://www.thisismoney.co.uk/money/article-2095909/How-pay-21-tax-100-000-income-child-benefit--IR35-rules-explained.html?ito=newsletter

Takes a little effort.:cool:

heathcote123

travellingbum wrote: »

All legal of course:)

http://www.thisismoney.co.uk/money/article-2095909/How-pay-21-tax-100-000-income-child-benefit--IR35-rules-explained.html?ito=newsletter

Takes a little effort.:cool:

First 50k at around 20% - the rest is just deferred till you need to take it out of the company. You can't take the hundrek k out or you get hit with higher div taxes.

Most the papers seems to miss this entirely.

Kennyboy66

heathcote123 wrote: »

First 50k at around 20% - the rest is just deferred till you need to take it out of the company. You can't take the hundrek k out or you get hit with higher div taxes.

Most the papers seems to miss this entirely.

I suspect it didn't make clear that when you finally wind the company up, the assets left in would be subject to capital gains tax at 18%.

I'd imagine that you couldn't claim entrepeneur's relief as the assets would be all cash.

ohit

Leave the country in a particular year, become 'non-resident for tax-purposes' (round the world travel trip perhaps?), then pay yourself a salary as you are away.

Does require picking a country with favourable tax policy and maybe a bit of effort/setup in that location.

heathcote123

Kennyboy66 wrote: »

I suspect it didn't make clear that when you finally wind the company up, the assets left in would be subject to capital gains tax at 18%.

I'd imagine that you couldn't claim entrepeneur's relief as the assets would be all cash.

Do you know if this is the case with cash assets? - if so, can you buy shares instead?

rajinder

I was self employed and went on to the route of contracting having set up a limited company late last year. Old employment had it's tax year set from April to March. My limited company started from Sept 2011.

I am confused on when I could start paying myself a dividend and a salary (of up to my tax allowance) from the new limited company I set up as I have already earned well over my tax allowance and just on border line of high income tax. If I were to pay a further salary this year from my limited company I'd be on the high income tax bracket.

chrismac1

You wait until the new tax year. 6 April 2012.

zygurat789

travellingbum wrote: »

All legal of course:)

http://www.thisismoney.co.uk/money/article-2095909/How-pay-21-tax-100-000-income-child-benefit--IR35-rules-explained.html?ito=newsletter

Takes a little effort.:cool:

Isn't it true that the head of HMRC is paid this way?

Kennyboy66

heathcote123 wrote: »

Do you know if this is the case with cash assets? - if so, can you buy shares instead?

It excludes anything held as an investment.

I'm not a tax expert but you need to google Entrepeneurs relief.

http://www.hmrc.gov.uk/helpsheets/hs275.pdf

sunshinetours

Kennyboy66 wrote: »

It excludes anything held as an investment.

I'm not a tax expert but you need to google Entrepeneurs relief.

http://www.hmrc.gov.uk/helpsheets/hs275.pdf

Needs to be assets used in the course of trade and nor predominantly for investment purposes which is one reason why companies need to be careful not to build up too many reserves if they plan on selling up and using ER

Pretty shocking article not mentioning CGT on winding up the company IMO as it makes it sound like you never pay the ramnining tax on the monies built up whoch you do at 18 / 28% of course