Extracting profits from companies: Dividends

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Extracting profits from companies: Dividends by Mind Map: Extracting profits from companies: Dividends

1. Tax treatment

1.1. Recipient is an individual

1.1.1. Income tax at dividend rates

1.1.2. £2k tax-free allowance

1.2. Recipient is a company

1.2.1. Exempt

1.3. Payer

1.3.1. Not deductible

2. Dividend compared to bonus

2.1. Lower rate of tax overall

2.1.1. No NICs on dividends

2.2. Company law requirements

2.2.1. Distributable profits

2.2.2. Correct documentation

2.3. Not earnings

2.3.1. Pension contributions

2.3.2. State benefits

2.3.3. National Minimum Wage

3. Types

3.1. Interim

3.1.1. Can be varied

3.2. Final

3.2.1. Approved by shareholders

3.3. In Specie

3.3.1. Transfer of an asset

3.3.1.1. SDLT

3.3.1.2. VAT

3.3.1.3. Gain for company