New company formation - dividend split husband/wife

[LondonManc]

I have a 60/40 split
Wife used to be employed by my ltd co as well but presented her with a P45 when she accepted a job somehwere else

+1 on the first sentence. A good contracting accountant will tell you appropriate levels of shares, salaries, etc.

[WordIsBond]

Some updates for everyone's benefit:

I'll be the sole earner, my wife is a full-time mother. She won't have any income other than the Contracting Ltd Co payments.

As for the marriage and shareholding split - I appreciate the 'warning' but I'm happy to go with 50/50 split if that is indeed the most efficient method.

In that case, 50/50 is more efficient. You can also make her a director or secretary and pay her a small salary accordingly, which is even better. If she has the time and aptitude for bookkeeping / filing / paperwork etc, you can also pay her to do that. As long as the amount is reasonable for what she is doing, you are reducing your corporation tax and dividends, and up to £8K will attract no income tax or national insurance liabilities.

[northernladuk]

But has to be at the same rate as you would employ a stranger at. If there is no need for someone to do this role then drop the idea. 8k just to file your receipts (particularly when she doesn't) is just meh...

[TheCyclingProgrammer]

Even if you don't pay them a salary, if you're making your spouse a shareholder do strongly consider making them either a director or company secretary so they can be eligible for entrepreneurs relief in the future on any capital distribution, or you could end up paying more CGT than you need to.

[LondonManc]

But has to be at the same rate as you would employ a stranger at. If there is no need for someone to do this role then drop the idea. 8k just to file your receipts (particularly when she doesn't) is just meh...

My missus does all expenses, handles receipts, bank statements and looks after all Ltd dealings with the accountant. She's more useful than I could have ever imagined.

[LucidDementia]

50/50 split here.

My wife handles our accounts and is essentially my PA (I run a number of concerns alongside my contracting). Works very well for us.

And just a shout out to those who are sticking to 80/20 or 90/10 because you are wary that your marriage may not work out. Sorry to say it but your marriage is not going to work out.

[psychocandy]

50/50 split here.

My wife handles our accounts and is essentially my PA (I run a number of concerns alongside my contracting). Works very well for us.

And just a shout out to those who are sticking to 80/20 or 90/10 because you are wary that your marriage may not work out. Sorry to say it but your marriage is not going to work out.

Must admit I thought that too. Going in with the attitude that you're worried your mrs is going to do a bunk with the money is not a great place to start IMHO.

[LucidDementia]

Must admit I thought that too. Going in with the attitude that you're worried your mrs is going to do a bunk with the money is not a great place to start IMHO.

Agreed. It worries me when I see couples talking about "his money" and "my money".
How can you share a life but not share everything in that life?

A little off topic now though, so I'll stop pontificating.

[northernladuk]

Agreed. It worries me when I see couples talking about "his money" and "my money".
How can you share a life but not share everything in that life?

A little off topic now though, so I'll stop pontificating.

To a certain extent I'd agree but money is a funny thing, particularly when there is a large difference in income for a multitude of reasons.. I don't think it's as clear cut as it's all 'ours' in many situations. I've seen (and had it myself) where odd things are put in place to play to 'fairness', to help people's pride and to stop arguments where the main breadwinner throws it back in arguments etc. Sometimes these rather false setups can level the playing field. Every situation is different.

[LucidDementia]

I don't think it's as clear cut as it's all 'ours' in many situations.

I totally get where you're coming from, but to my mind if it's not clear cut that it's 'ours' then the marriage is already at risk. For me it's all or nothing. Perhaps this is one of the reasons more marriages end in the big D these days?

Apologies OP for derailing your fine thread.