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bigduckontax, Accountant
Category: UK Tax
Satisfied Customers: 3933
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What is the best way to seriously reduce my personal tax bill?

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What is the best way to seriously reduce my personal tax bill? I have just been hit with a 37k tax bill. Should I really put it into pension or, if I leave dividends in my company and draw down when I maybe am not working or earning less? Can I buy property as a rental investment even if my existing company is an engineering company?
Hello, I'm Keith and happy to help you with your question.

Yes, you can leave funds within your company to draw down as dividends at some future date as dividends do not affect the company's Corporation Tax (CT) position. If you put your own moneys into a pension fund it is one of the few ways an individual can reduce the tax burden provided the annual permitted maximum contribution is not exceeded. The company could also make pension contributions to your fund thus relieving CT liabilities.

Investment in overseas property is allowed providing the Articles of Association of the company do not preclude it. Most off the shelf companies, new or old, have very broad definitions of the business purpose of the organisation. The Articles can simply be changed if necessary providing the changes are approved by the shareholders.
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