Proof of funds - Ltd Company

Old Dec 16th 2016, 10:47 pm
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Default Proof of funds - Ltd Company

Hi.

Looked at many threads and CIC website and cant find an answer. I work via a Ltd company and have a fair amount of money tied up in there. I can get a letter off my accountant saying I am the main shareholder and its my cash so will CIC accept this balance as proof of funds for PR application??

Thanks

Rich
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Old Dec 16th 2016, 11:04 pm
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Default Re: Proof of funds - Ltd Company

no, shareholdings cannot be used as proof of funds.

The only way to use them would be to sell the shares and put the money in your account. Even then it may not be accepted unless it was there for a minimum amount of time.

It is still hit and miss whether people can use equity in a property,
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Old Dec 17th 2016, 2:11 am
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Default Re: Proof of funds - Ltd Company

Originally Posted by Richb1970
Hi.

Looked at many threads and CIC website and cant find an answer. I work via a Ltd company and have a fair amount of money tied up in there. I can get a letter off my accountant saying I am the main shareholder and its my cash so will CIC accept this balance as proof of funds for PR application??

Thanks

Rich
Unlikely as the cash belongs to the company ( assuming it is retained earnings), even if you are the only shareholder. An individual and a corporation are two separate entities. If the money tied up is invested and cannot be liquidated without selling the business, this makes it even less likley.

To take the cash out would also reduce the amount by how much tax is payable. To sell the business would likley trigger a CGT liability, reducing the value further. The only exception may be if the funds were shareholders loan that was repayable on demand and already tax paid.
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Old Dec 17th 2016, 4:41 pm
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Default Re: Proof of funds - Ltd Company

I think the OP means they have retained profits within the business. I have retained profits in my business as many contractors do. The funds can be instantly with drawn as a dividend.

Although I agree a company is a separate entity, as the only shareholder all of the retained profits are free to do with as that shareholder pleases.

If CIC won't recognise the cash then just drop a lump sum dividend? Surely that will just make it easier anyway?

Bear in mind that you'll now have a tax liability on dividends received over 5k.
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Old Dec 21st 2016, 7:33 pm
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Default Re: Proof of funds - Ltd Company

Originally Posted by Richb1970
Hi.

Looked at many threads and CIC website and cant find an answer. I work via a Ltd company and have a fair amount of money tied up in there. I can get a letter off my accountant saying I am the main shareholder and its my cash so will CIC accept this balance as proof of funds for PR application??

Thanks

Rich
What type of application are you making? Cant you use your previous years' tax returns to prove your earnings?
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Old Dec 21st 2016, 9:42 pm
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Default Re: Proof of funds - Ltd Company

Originally Posted by Edo
What type of application are you making? Cant you use your previous years' tax returns to prove your earnings?
Not for retained funds, they have not been 'earned' yet. A corporation is an entity separate from the individual.
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