As per the Arctic case the gifted shares are exempt from the settlements legislation. However what is considered as a gift? For example if at the time when the company was incorporated, both the husband and wife were allotted 50/50 shares - would this be still covered by the legislation? Is this still a gift? So effectively the husband found the company and made the wife an equal shareholder. Or is it important for the company initially to be 100% owned by the husband and then transferring shares to the wife.
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Settlements legislation exception
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Originally posted by cannon999 View PostAs per the Arctic case the gifted shares are exempt from the settlements legislation. However what is considered as a gift? For example if at the time when the company was incorporated, both the husband and wife were allotted 50/50 shares - would this be still covered by the legislation? Is this still a gift? So effectively the husband found the company and made the wife an equal shareholder. Or is it important for the company initially to be 100% owned by the husband and then transferring shares to the wife.merely at clientco for the entertainment -
It needs to be an “outright gift” - ie no strings attached, no conditions or arrangements for the gifted shares to be returned etc.
The gifted property also needs to be more than just a right to income so they need to be ordinary shares with equal rights to votes and receive capital on winding up.
I think in the Arctic case the shares were given at incorporation so it makes no difference whether they are gifted then or transferred later.Comment
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Originally posted by TheCyclingProgrammer View PostIt needs to be an “outright gift” - ie no strings attached, no conditions or arrangements for the gifted shares to be returned etc.
The gifted property also needs to be more than just a right to income so they need to be ordinary shares with equal rights to votes and receive capital on winding up.Comment
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Originally posted by TheCyclingProgrammer View PostI think in the Arctic case the shares were given at incorporation so it makes no difference whether they are gifted then or transferred later.
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Just a point on this, and it's a much argued one. We've had a noteable number of accountants mention creating a 51/49% split in favour of the contractor. I can't remember the exact reasons. Probably something to do with a nod to the main person in the arrangement but it's been hotly debated as to whether it makes any difference whatsoever. Just thought I'd mentioned it as a few reputable people have mentioned it.
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Originally posted by northernladuk View PostJust a point on this, and it's a much argued one. We've had a noteable number of accountants mention creating a 51/49% split in favour of the contractor. I can't remember the exact reasons. Probably something to do with a nod to the main person in the arrangement but it's been hotly debated as to whether it makes any difference whatsoever. Just thought I'd mentioned it as a few reputable people have mentioned it.Comment
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Originally posted by TheCyclingProgrammer View Post
It makes not a jot of difference to the settlements legislation but it may be helpful if you want to maintain majority control over your business. (Some agencies might also require this).Comment
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Originally posted by cannon999 View Post
Thank you, you confirmed what I was thinking.Blog? What blog...?Comment
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Originally posted by malvolio View Post
Kinda... Given dividends have to be paid in strict ratio of shareholding, the split is primarily driven by your individual tax positions and other income (if any). So do the sums around higher rate and things like child allowance (if applicable): it can always be changed as circumstances do.merely at clientco for the entertainmentComment
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