Gifted deposit from company

Vp0007

Hello everyone, 

My parents kindly gifted me some money for a deposit (£15,000). This money comes from their limited company and the only sole owners of this business are my mum and my dad. 

What’s the best way for them to remove this money from the business and transfer it to their personal bank account? Obviously profits are available in the company, so if they remove this money from the business account as dividends, would this be ok for solicitors?

Will be asking the business accountant too, but I want to make sure everything is done correctly so that it doesn’t seem as they avoiding paying taxes! 

DullGreyGuy

If they want to take it as dividends or a directors loan or pay themselves a bonus is up to them, all are possible, some will attract more tax than others but that'll be for them to pay. 

BoGoF

It's going to need a proper audit trail.

Keep_pedalling

If they already have saving to that amount it would probably be better to use those and top them back up from the company over time.

Hoenir

Vp0007 said:

What’s the best way for them to remove this money from the business and transfer it to their personal bank account? 

Speak to their accountant?  We know nothing of their personal tax affairs. 

Ultimately the money will just be a personal gift from them to you. Not a large enough amount to warrant investigation in isolation. 

Tucosalamanca

Vp0007 said:

Hello everyone, 

My parents kindly gifted me some money for a deposit (£15,000). This money comes from their limited company and the only sole owners of this business are my mum and my dad. 

What’s the best way for them to remove this money from the business and transfer it to their personal bank account? Obviously profits are available in the company, so if they remove this money from the business account as dividends, would this be ok for solicitors?

Will be asking the business accountant too, but I want to make sure everything is done correctly so that it doesn’t seem as they avoiding paying taxes! 

You can't just pull money out of a business to avoid taxes, it doesn't work like that, so no need to worry.

If everything is reported correctly, the correct tax will be taken somewhere along the line, assuming your accountant is doing their job properly.

Dividends would be the obvious solution and it's generally how directors receive most of their income.

Veteransaver

The obvious one is to make you a shareholder in their company and pay you a dividend.
Obviously depends on your tax rate vs theirs though.

MWT

Veteransaver said:

The obvious one is to make you a shareholder in their company and pay you a dividend.
Obviously depends on your tax rate vs theirs though.

Best left to their accountant I'd say, many pitfalls along the road if you try to 'make' someone a shareholder in a company that is already trading...

kingstreet

If your parents wish to remove profits from a limited company, they should, as suggested above ask their Accountant's advice. If taken as a dividend the voucher will give them an audit trail should your solicitor wish to see the source of the funds arriving in their personal bank account.