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cgt interaction with corporation tax.
2 Answers
any accountants out there?
AS THE NEW CGT RATE IS 18%.
Does the company pay tax on 21% of the profits and 18% on say a profit on share trading?
If you make a gain of �20000 CGT on sale of a share can you draw remuneration to eliminate the gain?
Dave
AS THE NEW CGT RATE IS 18%.
Does the company pay tax on 21% of the profits and 18% on say a profit on share trading?
If you make a gain of �20000 CGT on sale of a share can you draw remuneration to eliminate the gain?
Dave
Answers
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Companies don't pay CGT, they pay Corporation Tax on their chargeable gains. The new 18% rate does not therefore apply to them.
Remuneration paid to employees or directors will generally be allowable against trading profit, so you could pay a large bonus to decrease the taxable profit - or even create a loss which can be set against chargeable gains (but not vice versa). However, this bonus will be taxable in the hands of the recipient and will attract employers and employees national insurance contributions, and is very unlikely to be tax efficient overall. I would suggest you take professional advice.
Remuneration paid to employees or directors will generally be allowable against trading profit, so you could pay a large bonus to decrease the taxable profit - or even create a loss which can be set against chargeable gains (but not vice versa). However, this bonus will be taxable in the hands of the recipient and will attract employers and employees national insurance contributions, and is very unlikely to be tax efficient overall. I would suggest you take professional advice.
Thanks
On the tax efficient front, I need to draw remuneration in the last three years for an average salary for company pension purposes. I have a company pension which has a lot of money in it and have to do it to get the maximium tax free lump sum based on the final year salary in four years time. I either sell shares I have profited on via the company or put a loan in the accounts to cover the remuneration and to pay the nat insurance and tax.
Any other ideas?
On the tax efficient front, I need to draw remuneration in the last three years for an average salary for company pension purposes. I have a company pension which has a lot of money in it and have to do it to get the maximium tax free lump sum based on the final year salary in four years time. I either sell shares I have profited on via the company or put a loan in the accounts to cover the remuneration and to pay the nat insurance and tax.
Any other ideas?
1 to 2 of 2
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