Jordi is a director and shareholder of Traiste Ltd. He has asked for your advice in the payment implications for Traiste Ltd of alternative ways for Jordi to extract profits from the company.

Traiste Ltd:
– Is a UK resident unquoted trading company.
– Has two shareholders, Jordi and Kat, who each own 50% of the 1,000 £1 shares in issue.

Kat:
– Is resident and domiciled in the UK.
– Is 58 years old.
– Is a director and shareholder of Traiste Ltd.
– Will receive employment income of £34,000 from Traiste Ltd and dividends from other UK companies of £4,000 in the tax year 2017/18.
– Has already used her annual exempt amount for capital gains tax purposes for the tax year 2017/18.

Kat – proposed sale of shares:
– Kat subscribed for her 500 shares in Traiste Ltd at par on the incorporation of the company on 1 March 2013.
– She wishes to sell all of her shares before the end of 2017, and retire from the company.
– Kat’s brother, Jordi, has offered to buy these shares for £47 each. He is not prepared to sign any tax election in
relation to this offer.
– Alternatively, Traiste Ltd will buy these shares for their market value of £52 each.

Jordi:
– Is resident and domiciled in the UK.
– Is 53 years old.
– Is a director and shareholder of Traiste Ltd.
– Is paid a gross annual salary of £45,000 by Traiste Ltd.
– Wishes to extract an additional cash sum of £30,000, net of all taxes, from Traiste Ltd, to be paid on 31 March 2018.
– The additional sum will be extracted as either a bonus or a dividend.
– Will not receive any other taxable income in the tax year 2017/18.

Required:
(c) Explain, with supporting calculations, the amount of any payments to be made by Traiste Ltd to HM Revenue and Customs (HMRC) in respect of each of the two ways for Jordi to extract the additional £30,000 cash from the company, and state the due date of any such tax payments. (5 marks)