Buying into a Business

tacpot12

tatties wrote: »

Tacpot, just out of interest, what calculation did you make to get the 34k?

£280k divided by five years is
£56k pa, leaving £44k pa if your share of the income is £100k pa. I them put £44k into the HMRC calculator for partnership tax and NI. This said the tax and NI payable would be about £10k pa. (About £6k tax and £4K NI) This leaves you with £34k net.

With that level of tax, HMRC will expect a payment on account for the following year so your first year of paying tax in this way wil also require a payment of £3k.

tatties

tacpot12 wrote: »

£280k divided by five years is
£56k pa, leaving £44k pa if your share of the income is £100k pa. I them put £44k into the HMRC calculator for partnership tax and NI. This said the tax and NI payable would be about £10k pa. (About £6k tax and £4K NI) This leaves you with £34k net.

With that level of tax, HMRC will expect a payment on account for the following year so your first year of paying tax in this way wil also require a payment of £3k.

Hi thanks very much.

Is the £56k payment not taxed at all before its paid?

agrinnall

tatties wrote: »

Hi thanks very much.

Is the £56k payment not taxed at all before its paid?

No, because you said right at the start that the £100K profit is before tax.

silvercar

I think this question would be better placed on the tax board.