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Non-tax considerations

The composition of a proprietor’s remuneration package should be considered carefully to try to achieve the most tax efficient result possible. Tax is, as usual, not the only consideration; the following must be taken into account in tax planning for a proprietor’s remuneration:

1. •

   ensure sufficient distributable reserves for payment of dividends, not only to satisfy immediate requirements but also taking into account future plans

2. •

   requirement for shareholder / external investor approval under terms of Company’s Articles of Association / Shareholder’s agreements, etc

3. •

   regulatory / industry requirements and guidelines relating to director’s remuneration

4. •

   Companies Act requirements regarding declaration and documentation of dividends

5. •

   timing and mechanics of payment of tax (see further guidance below)

6. •

   the application of the National Minimum Wage Act (see further