Commentary

40.6 Double taxation and property held outside the partnership or company

BUSINESSES vol 4(2) start-up, sale and purchase
| Commentary

40.6 Double taxation and property held outside the partnership or company

| Commentary

40.6 Double taxation and property held outside the partnership or company

Running a business through the medium of a limited liability company may involve a certain element of double taxation. This can happen in two ways.

First of all, dividends, like any distributions made by a company, are not deductible expenses for the purposes of corporation tax1. In other words, dividends are paid out of profits which have already been subject to tax. Although no further tax is levied on a basic rate taxpayer in relation to dividends received, higher rate band taxpayers suffer tax at an effective rate of 25%

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