How Do you have your Ltd Co. Setup?

[Bigbird]

No offense taken at all, I'm always happy to be contradicted if I'm wrong.

My understanding was that if the wife had a different class of share (or even a different number) she would still receive a return on her investment in the company but the revenue would see it as being more in line with her contribution if it was substantially different to a 50/50 split. I could be over-simplifying it though.

*goes off to read the pcg website in detail, always comes here 1st though cos you lot seem to know mmore and explain better*

[XLMonkey]

Nope, nothing to do with that - it's all about risk and reward. Even more specifically,
- HMRC say that in cases where a spouse has a share in a company where the principal fee-earner is the partner, then the share is nothing more than a right to receive a dividend (and as such, qualifies as a "settlement" under the Settlement's act)
- We say, a share in a company has all sorts of other rights and duties (e.g. right to vote at AGM's, risk of loss of investment capital etc), so it isn't a settlement at all.

The Court of Appeal decided that We (by which I really mean the PCG) were right, and that HMRC were wrong.

So, to defend your position against HMRC, it doesn't really matter how many shares your spouse has, it only matters that they are the same type of share as the ones that you have.

[tim123]

Nope, nothing to do with that - it's all about risk and reward. Even more specifically,
- HMRC say that in cases where a spouse has a share in a company where the principal fee-earner is the partner, then the share is nothing more than a right to receive a dividend (and as such, qualifies as a "settlement" under the Settlement's act)
- We say, a share in a company has all sorts of other rights and duties (e.g. right to vote at AGM's, risk of loss of investment capital etc), so it isn't a settlement at all.

The Court of Appeal decided that We (by which I really mean the PCG) were right, and that HMRC were wrong.

The court of appeal may have decided that it wasn't a settlement. But that wasn't the reason why (nor was it even the reason argued by the barrister)

tim