Shoving some dividends into the missus

[northernladuk]

Bit with dividends "half of what you've got" is "half of what you're going to earn forever". I suppose in reality you'd close the company and start a new one?

But that has it's own challenges now with recent changes so not quite such a straight forward option.

[TheCyclingProgrammer]

But that has it's own challenges now with recent changes so not quite such a straight forward option.

True, though all of the recent changes are irrelevant if you distribute all of the company profits as a one-off dividend before closing down the company (which would of course mean your estranged spouse would get a windfall).

[kaiser78]

Bit with dividends "half of what you've got" is "half of what you're going to earn forever". I suppose in reality you'd close the company and start a new one?

You could claim Entrepreneur's Relief at the same time.

[northernladuk]

You could claim Entrepreneur's Relief at the same time.

Eh???

[TheCyclingProgrammer]

You could claim Entrepreneur's Relief at the same time.

There would be no point as any capital distribution would be treated as income if you're closing the company and just starting a new one again.

[Lance]

Bit with dividends "half of what you've got" is "half of what you're going to earn forever". I suppose in reality you'd close the company and start a new one?

No.
You'd get back her shares as part of any settlement.
She's not going to want the complication anyway and S660 would apply (as she'd no longer be a spouse) so she'd have fun and games with the taxman if she kept the shares.

[TheCyclingProgrammer]

No.
You'd get back her shares as part of any settlement.
She's not going to want the complication anyway and S660 would apply (as she'd no longer be a spouse) so she'd have fun and games with the taxman if she kept the shares.

S624 (S660 does not exist) would not suddenly apply. Firstly because it doesn't automatically apply just because you are unmarried and secondly because any investigation under s624 would be based on the point at which the settlement was made.

[pr1]

No.
You'd get back her shares as part of any settlement.
She's not going to want the complication anyway and S660 would apply (as she'd no longer be a spouse) so she'd have fun and games with the taxman if she kept the shares.

Lol? If this was the case you'd be admitting that it was only done for tax avoidance purposes, of course she gets to keep her shares - they're her shares to do what she wants with (she could sell them back to you at an agreed price or hold on to them for indefinite dividends and/or capital distribution)

[TheCyclingProgrammer]

Lol? If this was the case you'd be admitting that it was only done for tax avoidance purposes, of course she gets to keep her shares - they're her shares to do what she wants with (she could sell them back to you at an agreed price or hold on to them for indefinite dividends and/or capital distribution)

Yup, if anything any kind of arrangement that means she has to give back the shares when you split up is likely to increase the risk of being caught by the settlements legislation as HMRC would try and argue that you retained an interest in the shares all along.

Regardless of the technicalities I think a risk of an investigation under settlements legislation is very low anyway so this would be the least of my concerns.