Accountants for property company directors taking money out
You own a property company, profit has built up inside it, and you want it out without paying more tax than you need to. The order you draw in matters more than the total: a director's loan balance comes back to you with no personal tax, dividends are taxed at the 2026/27 rates on top of corporation tax already paid, and salary carries employer National Insurance the company must fund. A specialist looks first at what your director's loan account really stands at, whether the company keeps the small profits rate, and how much profit you actually need to draw. You finish with an extraction order for the tax year and the paperwork prepared to match.
What lands on your desk
Taking money out of a property company: the tax on each route
Dividends against salary at the 2026/27 rates
From 6 April 2026 the dividend rates are 10.75% basic, 35.75% higher and 39.35% additional, after an allowance of only £500. Basic and higher each rose by two percentage points from the 8.75% and 33.75% of 2025/26, so a mix settled two years ago is no longer the same answer. Salary is deductible against corporation tax, but the company pays employer National Insurance at 15% above the £5,000 secondary threshold, and a sole-director company cannot claim the Employment Allowance. The extraction calculator compares the routes.
The director's loan balance you can repay without tax
If you transferred properties into the company, it almost certainly owes you money, and repaying that credit balance costs no personal tax. It is usually the first route. The trap is exhaustion: drawing monthly against a balance created at incorporation can run a large credit down within four or five years, and the year it empties is the year you move to higher-rate dividends.
When the loan runs the other way
Take out more than the company owes you and the account goes overdrawn, making you a participator with a loan from a close company. Where it is still outstanding nine months and one day after the year end, the company pays a section 455 charge under CTA 2010: 35.75% for loans made on or after 6 April 2026, 33.75% for earlier loans, because the rate follows the dividend upper rate at ITA 2007 s.8(2). It is refunded once you repay, but slowly.
What the company pays before you take anything
Profit is taxed inside the company first: 19% up to £50,000, 25% above £250,000, and marginal relief in between at an effective 26.5%, with the thresholds divided between associated companies. A close investment-holding company loses the small profits rate and pays 25% throughout. Most buy-to-let companies are not caught, because letting land commercially to unconnected tenants is a permitted purpose under CTA 2010 s.18N, but letting to a connected person, or to their spouse or a relative, falls outside it. Check the company figure first.
How we help
What we review and prepare each tax year
A review of the extraction order for this tax year
A specialist reviews the company's profit, your other personal income, the director's loan account, the share classes and whether an employer pension contribution is available, then sets out the order to draw in and what each step costs. The output is a sequence with figures attached rather than one number, because the right mix depends on your income outside the company.
The director's loan account rebuilt from the records
Where the loan account has drifted, a property company accountant reconstructs it from the incorporation paperwork, the bank statements and the expenses you paid personally, and tells you what the balance really is. That figure decides how much can come out with no personal tax, whether a section 455 exposure is building, and the year the credit balance runs out.
Payroll, dividend paperwork and the filings that follow
Your accountant prepares the payroll for any salary drawn, the board minutes and dividend vouchers for each distribution, the section 455 entries on the corporation tax return, and the dividend pages of your self assessment. Accounts and personal return come from the same figures. The sequencing guide shows how this runs across several years.
What the enquiry needs from you
Describe the company and what you want to take out, and the three figures that matter come first: the director's loan credit balance, the profit already taxed at 19% to 25%, and your income outside the company. Those set whether the next pound leaves as a loan repayment, a dividend or an employer pension contribution.
Not sure which of these applies to you? A free consultation sets out where you stand, with no obligation.
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Frequently asked questions
Neither on its own, because they are taxed in different places. Salary reduces the company's corporation tax but costs employer National Insurance at 15% above the £5,000 secondary threshold, which a sole-director company cannot cover with the Employment Allowance. Dividends come out of profit already taxed at 19% to 25%, then are taxed on you at 10.75%, 35.75% or 39.35% above the £500 allowance. The crossover depends on your other income.
Only where the company owes it to you. If you funded the company or transferred properties into it, the director's loan credit balance is a debt the company repays, and a repayment is not income, so no personal tax arises. Reimbursed business expenses work the same way. Everything else is salary, a dividend, a pension contribution or a loan, and each carries a tax consequence.
The company owes a section 455 charge on any balance still outstanding nine months and one day after its year end. For loans made on or after 6 April 2026 the rate is 35.75%, matching the dividend upper rate; earlier loans carry 33.75%. The charge is refunded after you repay, but the refund follows the company's tax cycle. Repaying shortly before the deadline and redrawing after it is caught by anti-avoidance rules.
It can, and for many property company owners it is the cheapest route out. An employer contribution is deductible against corporation tax where it meets the wholly and exclusively test, carries no National Insurance, and is not taxed on you when paid. The annual allowance is £60,000, and unused allowance from earlier years can sometimes be carried forward. The money is locked until pension age.
An outright gift of ordinary shares to a spouse is effective for dividend purposes because of the spouse exception in the settlements legislation, and it is a common property company structure. It has to be a real gift of real shares with full rights, not a paper arrangement leaving you with the income. Shares held for a child under eighteen are different: that income is treated as yours. Adult children are not caught in the same way, so an outright gift of shares to an adult child, with no benefit kept by you, carries the dividends on those shares to them, and growth shares are how a family company passes future value down, set out for landlords planning retirement and succession.
It depends on your total income, because dividends sit on top of it. After the £500 allowance, dividends in the basic rate band are taxed at 10.75%, in the higher rate band at 35.75%, and above the additional rate threshold at 39.35%. That sits on top of corporation tax the company has already paid. The dividend tax calculator gives the personal figure.
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