Adding house wife as a ltd company director

[Craig@Clarity]

I would speak to your accountant firstly, if you have one. Based on what little information we have, has the company been trading a little while? Are you aware of the settlements legislation and the implications of giving shares to your wife? If it's a brand new company that hasn't traded at all, assuming she doesn't have any other income then it maybe a good option to make her 50% shareholder. If you need more advice, we would need to know more specifics on your set up etc.

[kaiser78]

is it a good idea ?
what should be the percentage ?

thanks for help

It's a good idea until you decide to divorce (serious point btw).

[MclarenBoy]

thanks for the replies
Shes not working. she doesnt have any income from anywhere.
My company is running for the last 6 years.
i normally make 80 - 100 K annually .

what other information you guys need ?

Thanks

[TheCyclingProgrammer]

thanks for the replies
Shes not working. she doesnt have any income from anywhere.
My company is running for the last 6 years.
i normally make 80 - 100 K annually .

what other information you guys need ?

Thanks

The short answer is a) Yes you can probably make her a shareholder, b) You probably ought to make her a company officer if you do this for reasons pointed out already and c) its not unreasonable to pay an office holder some form of nominal salary potentially up to the personal tax threshold.

However, you would be advised to consult your accountant to a) make you aware of any potential issues, b) ensure that this is done correctly and c) make sure that your wife is aware of her tax and reporting obligations as well as any legal obligations of being a company officer.

[WordIsBond]

The short answer is a) Yes you can probably make her a shareholder, b) You probably ought to make her a company officer if you do this for reasons pointed out already and c) its not unreasonable to pay an office holder some form of nominal salary potentially up to the personal tax threshold.

However, you would be advised to consult your accountant to a) make you aware of any potential issues, b) ensure that this is done correctly and c) make sure that your wife is aware of her tax and reporting obligations as well as any legal obligations of being a company officer.

All of this.

Not sure why OP got harassed over saying his wife is a housewife. The fact that she isn't otherwise employed is very relevant to the discussion.

OP, if you make her a director then she can sign off accounts if you get ill or worse. Extracting funds / closing the company / disposing of assets, if necessary, all of that is easier if she is a director. Therefore, there are sound business reasons to have a second director, and because it comes with legal responsibilities, sound business reasons to pay her a salary. I'd say you should pay her at least enough in annual salary to accrue state pension credits.

Again, run this by your accountant first, as noted.

[northernladuk]

All of this.

Not sure why OP got harassed over saying his wife is a housewife. The fact that she isn't otherwise employed is very relevant to the discussion. .

Because it's a really poorly thought out and I'll researched lazy question using some out of date terminology. All in it gives the first impression he's either a troll or a bit of a burke.

[Chart Accountancy]

Not knowing the specifics or background in full.

But generally: if you are going to make her a shareholder, you may wish to consider either director and/or employee in the company, if she does not have/has little income elsewhere.

This will also help with meeting the eligibility criteria for entrepreneurs relief too when you come to close the company in the future, as you have to be a director or employee holding 5% or more of the shares.

If she is not working and has no other income, you'd at least want to consider giving her a salary to match the NI threshold. But if you are both employees, you may wish to have one employee at the personal allowance level and the other just over the NI threshold to make use of the employment allowance.

There's lots of possibilities on this one!

Holding 5% shares in the company would not be sufficient to claim the entrepreneurs relief so this may be rather misleading to say that adding the wife as a shareholder would be of any help to claim the relief, as for a service company where perhaps the only income is consultancy fees with expenses at a minimal level, it may be difficult to justify that cash surplus is needed for trading operations.

As the income shifting legislation does not apply to spouses, it would be tax efficient to split the shares so each can utilise their basic rate limit along with the dividend allowance of £2,000. If the wife is not added as a director, but only as an employee, she would need to be set up to receive a salary on a market rate matched to her respective responsibilities in the company in line with the work she does. Otherwise, if the wife is set up as a director, the salaries can be set up close to the personal allowance each to obtain maximum tax relief.

[TheCyclingProgrammer]

The settlements legislation DOES apply to spouses by default. That’s the whole point of the Arctic case and the spouse exemption. That’s why it’s very important to speak to an accountant and set things up correctly!

Louisa was not wrong when she said you would need to be a director (any office holder really) or employee with at least 5% shares to qualify for ER. I don’t know why you are saying otherwise.

Entrepreneurs' Relief - GOV.UK

[WordIsBond]

I'll researched lazy question

In the context, I appreciated this.

I can see blasting the guy for being lazy and failing to research it. It's been answered all over the site multiple times.

But 'housewife' is not such out of date terminology and is a legit occupation worth a high value. How much is a housewife worth? - Telegraph

[northernladuk]

In the context, I appreciated this.

I can see blasting the guy for being lazy and failing to research it. It's been answered all over the site multiple times.

But 'housewife' is not such out of date terminology and is a legit occupation worth a high value. How much is a housewife worth? - Telegraph

Yup. No problem with that in isolation but it's not just that. His whole post opened him up for ribbing, correct terminology or not.