Up until April 2016 most directors of limited companies were using a mixture of salary and dividends to withdraw money from their Companies as this was the most tax-efficient payment method.
As you know from April 2016 the rules of taxation for limited companies will be changing through the introduction of the new Dividend Allowance in the form of a 0% tax rate on the first £5,000 of dividend income per year. Dividends in excess of the £5,000 allowance will be taxed according to the appropriate tax band. This is a radical change in the way tax is collected from business in the UK and will see many accountancy firms considering their tax planning guidelines and recommendations to their clients.
As we provide legal services we leave tax planning to the tax experts but we are aware that one of the recommendations will be for companies to review their tax and dividends arrangements. In particularly this may affect shares restructure and sub divisions which is an area we know well.
There are many ways to restructure the shares of a company and choosing a solution will depend on a variety of factors including the size of the company, the number of shareholders and their ultimate goal. We can provide a full pack of resolutions, notice, minutes and forms to effect a whole range of share restructures, sub-divisions, class share creation or reclassification. The packs are fully completed ready for signature and dating. The service includes adopting new articles under the 2006 Act complete with full rights and restrictions on the share capital classes and any additional requirement at your request such as bad leaver/good leaver clauses and pre-emption rights.
Moreover, our service is cost effective and efficient with all documents prepared and sent to you within 24 hours. Click here to see the range of share re-structures we offer and specific cost.
We will be delighted to speak to you further if you and your clients will benefit from our services. As this is an area affecting many companies and individuals across the UK we will appreciate it if you share this Blog with your network if you have found it beneficial.
This post was written by Adrian Smart