Got Married - Add spouse ?

[barrydidit]

nobody ever enters marriage intending on it being short term, surely

Maybe not, but some only plan on outlasting their other half.

Rich hermit's will cutting off his widow from inheritance is 'genuine' in final twist in drama between Alpine shepherd and Parisian

[LondonManc]

Maybe not, but some only plan on outlasting their other half.

Rich hermit's will cutting off his widow from inheritance is 'genuine' in final twist in drama between Alpine shepherd and Parisian

Up to them I suppose. If money is the main thing about the marriage, I don't see it as anything more than a legal agreement.

[barrydidit]

Up to them I suppose. If money is the main thing about the marriage, I don't see it as anything more than a legal agreement.

True enough. I guess not everyone is as idealistic as you and I though (or our shepherd friend) eh?

[LondonManc]

True enough. I guess not everyone is as idealistic as you and I though (or our shepherd friend) eh?

Indeed. Met my now wife of over 17 years when I was 20. Nearly 22 years later, we're happier than ever. I'm either doing something right, or something incredibly wrong.

[northernladuk]

Indeed. Met my now wife of over 17 years when I was 20. Nearly 22 years later, we're happier than ever. I'm either doing something right, or something incredibly wrong.

You are just playing the numbers game my friend

[konsultant]

Good lawd what have I started

[konsultant]

TLDR; yes you should, if it makes sense for your personal financial circumstances and you are aware of the implications.

One of the least risky forms of income splitting is to make your spouse a shareholder. What percentage you choose is up to you. Some do 50/50, my wife has 25%.

You need to consider her future employment and salary prospects too. No point paying her £30k dividends a year if a) she would pay higher rate tax on it anyway or b) your business isn't making enough profit.

As far as whether HMRC can attack it, there is a significant piece of case law known as the Artic systems case which established under what circumstances income splitting with a spouse could be caught by a piece of anti-avoidance legislation known as the settlements legislation (s624 formerly s660) and when it could not.

So long as you gift ordinary shares that rank equally with your shares and there's no dodgy arrangements to funnel any dividends directly back to you (e.g. by paying them into your account - her dividends are hers to do as she pleases with) or any conditions attached under which the shares must be returned to you) then this arrangement is safe from attack. I'm surprised your accountant didn't explain this to you.

You may want to consider making her a company officer too as this would make her eligible for entrepreneurs relief in the future if you ever close the company and take a capital distribution (under today's rules anyway). Doesn't have to be a director, company secretary will do. Director is probably easiest and the rules for two directors without employment contracts regarding pension auto enrolment are clear (you can opt out).

If she is a director you could also pay her a nominal salary. Discuss this with your accountant.

Thank you.

No, the accountant simply mentioned that HMRC recently have started attacking income shifting. But I know few friends who do this and wanted to get a wider view from everyone on the forum.

From your reply, I gather that this is a general practice with most contractors.
I understand the point regarding getting the dividends back by other means. I was looking at a 25% share to my wife.

The accountant did mention about making her a secretary and it being beneficial when the company closes down, though I havent asked how.

"If she is a director you could also pay her a nominal salary. Discuss this with your accountant"

I assume I also pay if she were a secretary?

So does splitting the shares 75-25 or making her a secretary or both have any tax benefits, if yes what specifically?

Meanwhile I will read up more on s624.

Thank you

[konsultant]

Thank you SimonMac and others.

Without getting into divorces and marriages - what are the tax benefits of stock split or creating additional shares or paying a salary to your spouse?

I have read about you doing it, but would be useful to know the benefits.

Regards

[northernladuk]

Thank you SimonMac and others.

Without getting into divorces and marriages - what are the tax benefits of stock split or creating additional shares or paying a salary to your spouse?

I have read about you doing it, but would be useful to know the benefits.

Regards

Depends on the split and other situations. Your account should be able to create a tax planner for you that will show the best way for you and the numbers.

Or have a search for some sites that have comparisons

[konsultant]

Thank you ^^