Two really quick questions - sorry guys, I know you've heard them all before!

[ASB]

Of course you can do 2.

But what are you trying to achieve?

I assume pay less tax between you ?

Before the dividend tax and allowance it was much easier to calculate any difference. It would need:-

- one party to be a higher rate payer.
- one party to have unused zero or basic rate band

It may also be the case that the co was retaining large amounts in order to avoid higher rate taxation which would otherwise be paid out.

As has been pointed out the settlements legislation flows from whether or not an interest is retained. We are not married so no is a lot of peoples views.

But really it depends. The more joined your finances the more likely an interest is to be retained.how are all the bills paid. Where does that funding come from. Do you have joint assets and liabilities. All would possibly increase the risk.

Hmrc used have a guide. It can probably be found on the government archive. It was entitled a practitioners guide to the settlement legislation. It is way out of date but did highlight their general thinking.

Then there are consequences shold the relationship fail.

[cojak]

Two really quick questions - sorry guys, I know you've heard them all before!

I appreciate that everyone's focused on the tricky part of the OP's question, but the expenses one is pretty straightforward if where they've worked for the last 24 months is known.

Your contractor colleagues will claim expenses if they previously worked in Manchester or Leeds (for example) in the last 24 months. There are nuances to this so look up the thread on the 24 month rules.

[malvolio]

I used to have a very safe accountant. After a conflict I switched to QDOS. Who were far easier to deal with. And less safe. And I got less enquiries from QDOS.

Some accountants see themselves as agents of the taxman.

Rubbish. An accountant is paid to keep you out of jail or from paying unnecessary fines. If you have one whose advice you can ignore without knowing why, or who is relaxed about you skirting the edges of good practice, you're not in a good place.

The basic rule with all tax matters is just because you can doesn't mean you should. Your accountant is there to draw the line in the sand, not just add up the numbers.

[TheCyclingProgrammer]

But really it depends. The more joined your finances the more likely an interest is to be retained.how are all the bills paid. Where does that funding come from. Do you have joint assets and liabilities. All would possibly increase the risk.

This is of course likely to be HMRCs only real line of attack in an unmarried situation, assuming no other dodgy conditions were attached to the gift of shares and is where the main risk lies.

That being said, they could have made the same argument in the Arctic case, that Mr Jones still benefitted from the dividends paid to his wife and therefore that the gift was not an outright gift as he retained interest in his own right.

They didn't though (IIRC, or if they did the judges dismissed it) so I don't personally view it as a strong argument from HMRCs point of view.

[northernladuk]

Really appreciate any responses - I know you must get this all day every day.

Cheers.

Yes we do. If you realise this why don't you do something to help yourself find the answers first?

[SueEllen]

The reason not to give shares to an unmarried partner is if you separate the other party can't give the shares back to you. They also have no legal obligation to sell the shares back to you, and then you would be legally obliged to pay dividends to them until the company has no funds to do so.

If you were married half the company's income would be the spouse's anyway. However if they aren't a shareholder it is more difficult for them to find out how much the company has.

[SueEllen]

This is of course likely to be HMRCs only real line of attack in an unmarried situation, assuming no other dodgy conditions were attached to the gift of shares and is where the main risk lies.

That being said, they could have made the same argument in the Arctic case, that Mr Jones still benefitted from the dividends paid to his wife and therefore that the gift was not an outright gift as he retained interest in his own right.

They didn't though (IIRC, or if they did the judges dismissed it) so I don't personally view it as a strong argument from HMRCs point of view.

I'm sure one of the former Tory chancellors - Nigel Lawson - said that was just one the unintended consequences of the legislature as married couples would always maintain an interest in such gifts given to each other.

[TheCyclingProgrammer]

I'm sure one of the former Tory chancellors - Nigel Lawson - said that was just one the unintended consequences of the legislature as married couples would always maintain an interest in such gifts given to each other.

They would but not for the reason highlighted, but due to the way the legislation is written (which by default treats one person as retaining an interest if their spouse does).

That's why they added the spouse exemption, to make things fairer to married couples. As I said before, its effect is not to give married couples an unfair advantage, but simply to put them on the same footing as unmarried couples.

[northernladuk]

So in a nutshell
1) we don't know to didn't provide enough information.
2) It appears to be possible arguably it isn't a good idea.


But neither are 'quick' questions.

[Osiris1337]

But what are you trying to achieve?

Pay less tax. I'm a contractor, which comes with a lot of risk, so I want to maximise my after tax income, should I be without work for a period of time.

But really it depends. The more joined your finances the more likely an interest is to be retained.how are all the bills paid. Where does that funding come from. Do you have joint assets and liabilities. All would possibly increase the risk.

Our finances are pretty separate. We have no joint bank accounts and no joint assets. We are in rented accommodation and household direct debits are set up in my name. Things like her mobile phone contract, her health insurance etc come out of her bank.

Some accountants see themselves as agents of the taxman.

This seems to be the case here. He speaks like he has a real, personal gripe with people who don't pay the tax he feels they should. Honestly, the conversation was a one way monologue for ages whilst I stood outside work on my mobile trying to get a word in edgeways. I had to forcefully interrupt him to get in my other questions. It's all good though - he's entitled to his opinion and he's built a successful business. If our views don't align, I'm happy to go elsewhere.

The reason not to give shares to an unmarried partner is if you separate the other party can't give the shares back to you. They also have no legal obligation to sell the shares back to you, and then you would be legally obliged to pay dividends to them until the company has no funds to do so.

If you were married half the company's income would be the spouse's anyway. However if they aren't a shareholder it is more difficult for them to find out how much the company has.

This is good to know. Thanks for clarifying.

I appreciate that everyone's focused on the tricky part of the OP's question, but the expenses one is pretty straightforward if where they've worked for the last 24 months is known.

Your contractor colleagues will claim expenses if they previously worked in Manchester or Leeds (for example) in the last 24 months. There are nuances to this so look up the thread on the 24 month rules.

Ok cool, so let me provide more information. I live in London and I work in London, so my commute consists of a tube journey each day to and from work. Aside from a handful of occasions, I will be based at the same office for the duration of the contract. The bit I believe I might get caught out on with the 24 month rule is the Fixed Term Appointment part, which would seem to make my workplace get regarded as a Permanent Workplace. "The client’s site cannot be a temporary workplace if the contractor is working on a contract “that can be expected to last for all, or almost all, of the period for which he or she is likely to hold, or continue to hold, that employment"