URGENT HELP!! Divi before 6th or wait for correct advice on ER?

[northernladuk]

Interesting seems I have not factored in the £11,100 CGT allowance, so is the ER difference really that relevant?

I could gift my wife 50% of the shares as she has 11k available this year before the higher rate. So up to 10k Divi each before, 5k each after, and then wind up as capital with an 11.1k allowance each??

Is it really worth embarking on a knee jerk set up that is clearly for no reason than to aggressively avoid tax for the savings you will make? If you are should you not be speaking to a specialist that knows your situation rather than a bunch of strangers on the net who don't seem to agree either.......

[TheFaQQer]

Interesting seems I have not factored in the £11,100 CGT allowance, so is the ER difference really that relevant?

I could gift my wife 50% of the shares as she has 11k available this year before the higher rate. So up to 10k Divi each before, 5k each after, and then wind up as capital with an 11.1k allowance each??

Yes, you could.

I'd get onto someone who knows what they are talking about rather than a bunch of randoms on the internet.

[pr1]

If you are should you not be speaking to a specialist that knows your situation rather than a bunch of strangers on the net who don't seem to agree either.......

if all lawyers agreed their entire business model would collapse

[northernladuk]

if all lawyers agreed their entire business model would collapse

What in earth are you harping on about now?

[jamesbrown]

Interesting seems I have not factored in the £11,100 CGT allowance, so is the ER difference really that relevant?

Bear in mind that the TiS rules apply to any capital distribution (that is within scope), not simply a capital distribution to which ER has been applied. People often conflate ER with a capital distribution more generally. The risk, in the event that TiS bites, is having a capital distribution reclassified as a dividend distribution (so ER is relevant only insofar as it determines the amount at stake).

[WordIsBond]

Interesting seems I have not factored in the £11,100 CGT allowance, so is the ER difference really that relevant?

I could gift my wife 50% of the shares as she has 11k available this year before the higher rate. So up to 10k Divi each before, 5k each after, and then wind up as capital with an 11.1k allowance each??

I suspect to gift your wife shares just before closing the company would be seen as active avoidance outside the intent of the law and could invite scrutiny. I wouldn't do it, personally.

Whether ER or getting your closing amount below £25K, you still get the CGT allowance. The question is if it is capital gains or dividends, and that applies either way. I strongly suspect, but cannot prove, that if you are below £25K you are much less likely to be challenged on it. There probably just isn't enough money in it for them to pursue it unless it is absolutely 100% that someone is just trying it on. Making your wife a shareholder now might be seen, if they ever look at your case, as doing just that, of course. I suppose you could give her shares now and not take a big dividend, just take £5K each next year and again next April, then close down, and they might not look askance at that. And if you've been out of the game for a year, you say, "Well, I waited until it was clear I wasn't going back to contracting, then closed it." Hard to blame that on tax planning, and hard for them to say anything about giving shares to your wife a year before you close down.

I'm speculating. There are clearly some risks here. There are things you could do that increase them. Taking less than £25K as capital gains may reduce the risk, that seems likely to me, though admittedly that's only because it would be SANE for HMRC to focus on larger amounts rather than smaller ones, and sanity is not a guarantee.

Gifting your wife shares just before closing probably increases the risk. But nobody can really quantify these risks.