Income for limited company director

[Parthaab]

I have applied for two T1 G extensions before.
The first time, I showed only income that I had earned for the company in the said period. They were shown as 'profits in the company', but I did not withdraw it to show as 'dividend' and so saved tax.

Two years later, the second time, on someone elses advice, I withdrew the money to show 'dividend plus salary'.

I was successful both times, but the second time involved much more tax. When I called UKVI, they told that only income for the company should be enough ( i.e that I do not need to withdraw as dividend and pay tax unnecessarily ).

Will the experts be able to advice on which of the two will be acceptable ( as the second approach is expensive paying taxes, instead of leaving it in the company account as 'profits' ) for extension / ILR?

[Parthaab]

Would appreciate any guidance from seniors?

[O_Relly]

Both approaches are fine, as you yourself have successfully done in the past.

See point 92 and 100 in the T1G Policy Guidance (click).

[Parthaab]

Dear O_Relly, Thanks for the confident reply!
This makes a lot of difference for tax purposes. If I am allowed to show the income I have earned for my company ( instead of showing income plus dividend from the company ), then I could make my wife a company shareholder, and thus save tax - as is done regularly!