Can I change the share split?

**TheCyclingProgrammer** · 21 April 2020, 15:59

Whilst I wouldn't recommend frequently changing shareholdings, I'd say the risk of gifting her 5% now carries no more risk than gifting her 45% in the first place. Businesses do not generally have to justify to HMRC why they have changed shareholding.

Its hard to see a) why this would trigger any investigation - companies change their shareholdings all the time and b) what difference this would make to the effects of the settlements legislation based on the Arctic judgment.

**Old Greg** · 21 April 2020, 16:05

Originally posted by TheCyclingProgrammer View Post

Whilst I wouldn't recommend frequently changing shareholdings, I'd say the risk of gifting her 5% now carries no more risk than gifting her 45% in the first place. Businesses do not generally have to justify to HMRC why they have changed shareholding.

Its hard to see a) why this would trigger any investigation - companies change their shareholdings all the time and b) what difference this would make to the effects of the settlements legislation based on the Arctic judgment.

I looked at this 10 years ago. Is there a difference between issuing new shares to spouse and gifting spouse some of your own shares? If I ever knew, it's long gone from my head...

**malvolio** · 21 April 2020, 17:47

Originally posted by Old Greg View Post

I looked at this 10 years ago. Is there a difference between issuing new shares to spouse and gifting spouse some of your own shares? If I ever knew, it's long gone from my head...

Should have paid more attention to IPSE's advice, shouldn't you....

**Old Greg** · 21 April 2020, 17:53

Originally posted by malvolio View Post

Should have paid more attention to IPSE's advice, shouldn't you....

but IIRC I asked my accounatnt. I've not lived in the UK for five years so some stuff gets deleted.

**Lance** · 21 April 2020, 18:17

Yes you can.

I think that’s what your accountant said as well. Whilst reminding you that its your company and your risk. Which is quite right.

**malvolio** · 21 April 2020, 18:52

Did this a while back, and changed the did payouts straight away. The only real rule is to update your Company House return when it is due.

As for risk, the potential problem case is fairly arcane, but if you ensure you both have the same class of shares, that does not arise. The whole basis of the Arctic ruling was that the husband and wife are sharing the business risk and so can share the business reward however they see fit.

**TheCyclingProgrammer** · 21 April 2020, 19:09

Originally posted by Old Greg View Post

I looked at this 10 years ago. Is there a difference between issuing new shares to spouse and gifting spouse some of your own shares? If I ever knew, it's long gone from my head...

From a settlements point of view I don't think so. Possibly from a capital gains point of view but as gifts between spouses don't attract CGT anyway probably a moot point?

**NotAllThere** · 21 April 2020, 19:53

Originally posted by rapsberry View Post

Tried to get advice from my accountant about changing the share split but couldn't get any valuable suggestion as those guys always over-protect themself and don't go beyond something like:

A good accountant should spell out exactly what the risks are and let you choose.

Questions like "Are you happy you can justify it in the unlikely event you get investigated by HMRC?" are good questions. If you are, great, if not, don't do it. But always it has to be your decision. They're never responsible.

**Old Greg** · 22 April 2020, 07:52

Originally posted by NotAllThere View Post

A good accountant should spell out exactly what the risks are and let you choose.

Questions like "Are you happy you can justify it in the unlikely event you get investigated by HMRC?" are good questions. If you are, great, if not, don't do it. But always it has to be your decision. They're never responsible.

The problem is that not so good accountants sometimes don;t tell you what about the proposed behaviour is risky.

Can I change the share split?