Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. I am working on your question and will respond shortly.
Yes, I am working upon it. Firstly the Inland Revenue ceased to exist about five years ago on amalgamation with HM Customs and Excise to form HMRC.
You could be in trouble here. If the property is in the name of the company then there is no problem, rents come into the company and any surplus made by the company subject to Corporation Tax at 20%. Dividends up to 5K pa may be paid to shareholders tax free.
The danger is that if the buy to let is in your names than the deposit could be deemed a loan by the company to directors which must be repaid within nine months of your company's CT accounting period and suffer the taxation penalties set out here:
However, you suggest that the deposit was raised from dividends, assuming that the company had spare cash for this purpose, then no such loan has taken place. Remeber dividends do not count against the company in the CT computation.
I do hope that I have been able to shed some light on the situation.
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