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Extracting Value from Your Company

There are several way to extract value or release funds from your company. The top 10 methods of extracting value are listed below, however options 1 to 3 are normally only available to shareholders who work in the company as a director or employee.

  1. Directors’ remuneration and paying salaries to other family members;
  2. Provision of benefits in kind and company shares;
  3. Pension contributions;
  4. Dividends;
  5. Charging rent on personally owned property which is used by the company;
  6. Selling assets to the company;
  7. Charging interest on loans to the company;
  8. Loans or advances from the company;
  9. Purchase of own shares; and
  10. Liquidation of the company.

It is important to determine the tax efficiency for each method as the overall tax cost may vary depending on your circumstances. On an on-going basis, shareholders who are also employees may, in addition to drawing a normal salary, decide to extract company profits by means of a bonus or dividend.

Alternatively, owner-managers can ensure that adequate provision is made for their future pension and that tax efficient benefits in kind are provided.