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Divorce and Newly Contracting

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    Divorce and Newly Contracting

    Second time contracting, last time ended in 2010, now started again this year after leaving a permanent position off 7 years but this time during divorce proceedings which start in August 2016 and decrees nisi issued in January 2017.

    Brief Summary of events

    June 2017 - Resigned from permanent position after rejected offer to transfer under TUPE to another company.

    July 2017 - Formed a limited company, with two directors of equal share to start contracting, gained a 12 month contract.

    Limited company has been earning money and I have been drawing a salary from the company to take my gross earnings for 2017/18 to £40k. I have an accountant on board and I am not looking to make the most tax efficient process of the company, just to ensure that I have a Salary in line to my last position and each shareholder will only draw £5,000 each on dividends for this tax year.

    Divorce is not finalised, Solicitor not helping and doesn't seem to understand the finances behind contracting, looking to apply for decree absolute now, and two children are involved and I have them on average 14 nights a month.

    Went to court yesterday as ex took me to court over the financial matters, and was looking for Ancillary Relief. Judge's opinion was I should pay maintenance of £750-£1000 per month to keep ex in house.

    My concerns are around can ex claim a share of the company's earnings and can a judge order me to take more out of the company?

    My thinking around paying me £40K per year, was on the basis that I can still pay myself a monthly salary for six months, without working. CMS didn't seem to think dividends can be forced.

    What are the views if I was working for a limited company whereby I am not a director or shareholder? Would this be questioned by HMRC?

    Any views greatly appreciated.

    #2
    Brillo has much experience of being well shafted. He'll be along in a while, I'm sure...

    Good luck btw, don't envy your situation.

    Comment


      #3
      Originally posted by ladymuck View Post
      Brillo has much experience of being well shafted. He'll be along in a while, I'm sure...

      Good luck btw, don't envy your situation.
      Paging Brillo!!!

      Comment


        #4
        2 shareholders and not husband / wife - that alone is potentially going to cause you problems....
        merely at clientco for the entertainment

        Comment


          #5
          What if I was working for a limited company whereby I am not a director or shareholder?
          Won't work for quite a number of reasons... I'd forget this one.
          'CUK forum personality of 2011 - Winner - Yes really!!!!

          Comment


            #6
            Originally posted by eek View Post
            2 shareholders and not husband / wife - that alone is potentially going to cause you problems....
            Why would this potentially cause problems? Not been told of any issues by my accountant or solicitor.

            Comment


              #7
              Originally posted by John75 View Post
              Why would this potentially cause problems? Not been told of any issues by my accountant or solicitor.
              https://www.contractorcalculator.co....dividends.aspx

              Section 660 - S660 / S660a Advice :: Husband and Wife Tax :: Income Shifting Legislation
              'CUK forum personality of 2011 - Winner - Yes really!!!!

              Comment


                #8
                Enjoying this latest tranche of noobs?

                Comment


                  #9
                  Originally posted by stek View Post
                  Enjoying this latest tranche of noobs?
                  There are some belters aren't there. Does the cold weather set them off or something?
                  'CUK forum personality of 2011 - Winner - Yes really!!!!

                  Comment


                    #10
                    The other director is not my partner it is my brother and we are both contracting through the same company and operate as one.

                    Comment

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