How to pay dividends to foreign shareholders

[webanalyst]

Hi all,

I've my mother as 25% shareholder for my company as a foreign shareholder and she lives in India. How do I send her dividends share to her? Can I withdraw her dividend cash from the company bank account and record it as her dividends in company account? she doesn't have a bank account in india

[WTFH]

Hi all,

I've my mother as 25% shareholder for my company as a foreign shareholder and she lives in India. How do I send her dividends share to her? Can I withdraw her dividend cash from the company bank account and record it as her dividends in company account? she doesn't have a bank account in india

Where will she be paying tax?

[mudskipper]

Hi all,

I've my mother as 25% shareholder for my company as a foreign shareholder and she lives in India. How do I send her dividends share to her? Can I withdraw her dividend cash from the company bank account and record it as her dividends in company account? she doesn't have a bank account in india

How are you going to get the money to her without her having a bank account? What does she do for your company to warrant being a shareholder?

It all sounds a bit suspect - what does your accountant say about it?

[webanalyst]

Where will she be paying tax?

in india

[webanalyst]

How are you going to get the money to her without her having a bank account? What does she do for your company to warrant being a shareholder?

It all sounds a bit suspect - what does your accountant say about it?

Shareholder doesn't need to do anything to be a shareholder for a company.

[mudskipper]

Shareholder doesn't need to do anything to be a shareholder for a company.

Have a read up on Section 660 settlements legislation.

[MrButton]

Wow.

Give HMRC a call and see what they say. Then bend over.

[Lance]

I've my mother as 25% shareholder for my company as a foreign shareholder and she lives in India. How do I send her dividends share to her? Can I withdraw her dividend cash from the company bank account and record it as her dividends in company account? she doesn't have a bank account in india

Doing it in cash is perfectly legal under UK law. However.......
The link below is really important.... Read it and understand. It's legal but risky.
Legal is not the same as correct, and HMRC win cases against people who have't broken any laws.



[QUOTE=mudskipper;2619906]Have a read up on Section 660 settlements legislation.


As for other laws.... There are limits on how much cash you can carry across borders. You have to declare cash of more than €10,000 if trying to take it out of the EU. I imagine posting the cash is similarly limited.

What about Indian laws? I know you can't take Rupees into India. There may be other declaration limits as well.

Sounds like a terrible idea IMO.

[TheCyclingProgrammer]

Have a read up on Section 660 settlements legislation.

S624 does not change the fact that shareholders are not required to do anything in return for their shares.

If OP has willingly given up 25% of his business and 25% of the profits to a family member with no strings attached and no arrangements for those shares or dividends to come back to them then they are very unlikely to be caught by the settlements legislation.

The settlements legislation is generally more of a risk between spouses because in that case you need to ensure the spouse exemption applies otherwise the arrangement will be caught by default.

[webanalyst]

Doing it in cash is perfectly legal under UK law. However.......
The link below is really important.... Read it and understand. It's legal but risky.
Legal is not the same as correct, and HMRC win cases against people who have't broken any laws.





As for other laws.... There are limits on how much cash you can carry across borders. You have to declare cash of more than €10,000 if trying to take it out of the EU. I imagine posting the cash is similarly limited.

What about Indian laws? I know you can't take Rupees into India. There may be other declaration limits as well.

Sounds like a terrible idea IMO.

Thanks for your productive reply. I don't have to carry cash across borders. If her dividends can be withdrawn as cash, this can be sent to her by some valid money transferring means such as Western union and she can withdraw from western union in India with her ID.