The consideration of extraction of profit is crucially important to the owners of most companies. This must be considered before the end of the accounting period to ensure that the methodology selected is the most effective. There are a number of methods:
- Directors’ remuneration or bonus (& salaries to members of the family);
- Provision of benefits in kind;
- Pension contributions;
- Dividends;
- Selling assets to the company for value;
- Loans or advances from the company;
- Charging interest on loans to the company;
- Charging rent on personally owned property used in the company’s trade;
- Purchase of own shares; and
- Liquidation.
Certain of these are appropriate for consideration for use on an annual basis but others are more appropriate for a one-off planning exercise. Please call Debbie Story on 01484 723783 if you would like to discuss further.
