Re: Moving company bank money around...

On Sun, 29 Apr 2007 12:18:43 +0100, Simon <simon@xxxxxxxxxx> wrote:

Tim wrote:
"Peter Saxton" wrote
The profit isn't owed to the shareholders. A dividend has to
be declared before the shareholders are entitled to the money.

"Tim" wrote:
If that's the case, then who do you think gets the
money in the case of winding-up the company?

"Simon" wrote
Its shareholders by way of a dividend. ...
"Tim" wrote:
Surely the residual value can be taken as capital, and CGT paid instead?

"Simon" wrote
Nope, its the transfer of an asset and thats how it would be taxable.

If you count the cash as "an asset", then when an employer pays
money (salary) to an employee, it's a similar "transfer of asset".
Why is that taxed as income rather than "transfer of asset"?

Don't *all* financial transactions involve "transfer of asset"?



If a director or shareholder takes cash out of the business, this is an
extraction and will likely give rise to additional tax either under CT
or PAYE.
This is recorded as misappropriations and the director is likely to be
expected to fund this if the company has insufficient funds.

Assets remaining in the company that are siply transferred instead of
sold, are treated as the transfer of assets and taxed under ITEPA and
Class 1A NIC.

When I come accross this situation, I have to consider whether this is a
purposeful arrangement and if that is so, hgh penalty levels are set and
the director pursued vigorously. I have to pass all such cases past the
Criminal or Serious evasion teams depending on the amounts involved.

Most common though is for HMRC to collect the additional tax due under
S419.

--
Alan "Ferrit" Ferris

()'.'.'()
( (T) )
( ) . ( )
(")_(")
.

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