- This topic has 1 reply, 2 voices, and was last updated 7 months ago by .
- You must be logged in to reply to this topic.
PQ Awards Nominations
Please help us to win one of the PQ Magazine awards and send in the voting form >>
You can nominate us in any or all of the following categories: Online College of the Year, Study Resource of the Year, Private Sector Lecturer of the Year, and Accountancy Personality of the Year.
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
If an owner of small private limited company draws funds from the business as drawings, will it be taxed at dividends rates or non-savings income rates?
As its technically not a dividend because the money being drawn is not from accumulated profits/ retained earnings.
An unincorporated trader extracts funds from the business as drawings but is taxed upon the adjusted trading profit of the business not on those drawings.
An owner manager of a company is taxed on the funds extracted from the company which may be in the form of a salary or a dividend – drawings do not exist for owners of companies!
Refer to Chapter 26 on Tax Planning Style Questions – Section 3