Sarah Bradford explores what a tax-efficient profit extraction strategy might look like for personal and family companies in 2025/26.
The tax year 2025/26 started on 6 April 2025, resetting the tax ‘clock’. Now is the time to plan ahead to ensure that profits from a personal or family company during 2025/26 are withdrawn in a tax-efficient manner.
Painless extractions
As a company is a separate legal entity, if the directors and shareholders wish to use the company’s profits personally, they must extract them. There are various ways in which this can be done, some more efficient from a tax and National Insurance contributions (NICs) perspective than others.
The start of a new tax year is a time to take stock. There are changes to rates and allowances to consider, and personal circumstances may also have changed, which may change the amount
