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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Need help with a scenario. Client wants to take out a

Resolved Question:

need help with a scenario.
Client wants to take out a Dividend lets say £10,000. But the accounts for this year is showing a loss.
is he able to do that.
his balance sheet bottom figure shows £50,000.
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.

Hi.

A dividend can only be taken if there are sufficient undistributed profits/reserves from earlier years or the current year. The fact that the balance sheet shows assets of £50,000 does not mean there are undistributed profits in the company but it is more likely than if the balance sheet was negative.

I hope this helps but let me know if you have any further questions.

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