A friend would like to be a shareholder in a Ltd company.What would be the best : be an individual shareholder or be a corporate shareholder (company)? The profit will be taxed harder as individual shareholder or as corporate shareholder?
-- Edited by Andrea on Friday 10th of April 2015 05:10:43 PM
Dividends received by a company are exempt from corporation tax, but when the dividends received by the company are then paid on to the shareholders, they will be taxed in the normal way.
It may be advantageous for the company to hold onto the dividends received and pay their shareholders at a later date if it will beneficial for them to do so (i.e. different fiscal year). Also, who will be the shareholders in the corporate shareholders company? For example, if they are family members, it may save them tax as they will effectively be splitting the dividends between several individuals (and using up their BR bands).
I try to avoid corporate shareholders if I can because of the additional hassle.