Tax Efficient Profit Split from a Private Limited company

[enterthe]

Hi,

I'm starting a small limited company with an associate.

The associate will be the primary share holder (he'll own around 80%, I'll have 20%), but the profit split will be 50/50 as I'm providing the expertise.

What is the most tax efficient way to do this? I'd rather not pay 40%.

Thanks,

Enter.

 

[TheBramble]

If you're talking about a UK LTD, dividends are normally the way to go, but with an unequal share split you may find a dividend split that does not mirror equality of holdings might be subject to a non-cursory review by HMRC.

If this isn't for the long haul, or if it's effectively a one-off I'd suggest a non-LTD solution would be more appropriate.

If you're non-UK or any of the above do not apply, please disregard and seek professional advice. Actually, might be an idea to do that anyway.

 

[chump]

Formally....take small salaries and large divis to minimise your NI bills...informally the company could have all sorts of expenses