I own 100% of the shares in my ltd. What's the procedure for allocating either 50% to my wife or issuing new shares to end up with her having 50%.
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You call an company meeting, vote to issue further shares, then sell them to your other half. Your accountant should be able to provide you with templates to fill in.
Your accountant also should be able to advise you on the tax and S660A implications that might arise as a result..... -
Thx.
I'll have a chat with my accountant.Comment
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For tax reasons, you would be better to gift the shares to your wife than to issue her with shares or sell her them.Comment
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That's a good idea. Thanks for that Puma.Originally posted by THEPUMAComment
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Does that also apply to family members other than your spouse?
Eg can I make my retired mum a gift of the extra shares? (I hate to see that tax allowance go to waste)
Or does she have to be made a director of the company as well as a shareholder?The mind is its own place, and in itself, can make a Heaven of Hell, a Hell of HeavenComment
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Shareholders get dividends.
You give/sell whatever mum 10% of the shares then she gets 10% of the dividends.
Of course if any of the money finds it way back to you you could be in a whole heap of sh1t from S660 depending upon your view of this odious piece of legislation and the current cases being fought round it.Comment
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Pardon my ignorance in this matter - but whats to stop me giving my mum 10% shares and her drawing all the cash out and giving it to me?
Assuming there was no obvious paper trail like a bank transaction from her account to mine then surely she would be entitled to withdraw the money and spend it how she wants (ie give it to me)
Or is it the simple fact that a spouse/family member owns shares in the business but does not contribute earnings for the company that makes it a candidate for s660 investigation?The mind is its own place, and in itself, can make a Heaven of Hell, a Hell of HeavenComment
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I think you need to study some case law. While the Arctic case might give clarity on husband/wife deals, merely handing divis to someone else and having them repay you personally free of tax is evasion and ever-so-slightly illegal. Do it if you fancy 10 years in jail, or stop pissing around and run your business properly.Originally posted by ookookBlog? What blog...?
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Obviously there is nothing to stop her. It's just that it may have consequences in accordance with the law.Originally posted by ookook
I think in those circumstances any reasonable person would probably consider that the benefit of the income generated fell to you. This would probably be caught under 660A (If it was you kids it would be 660B instead). If you gave/sold the shares to me you would probably be just as caught if this transaction occured.
So, the big question is would gift of the shares to your mum be a settlement. Simple answer: yes. But, how about a sale ??. That is much more difficult to answer. If the owner of shares benefitted from the income and you had no retained interest there are still other areas HMCR might care to attack you on. The Ramsey principle is one (although I don't think they dig this out very often). Equally they could probably come up with a fairly creative reason as to why it was still a settlement anyway.
If you take your thoughts to their colclusion:-
1) Find 9 non tax payers
2) Give them each 10% of your shares
3) have them give you dividends back
4) Pay no tax
I think it is reasonably safe to assume that the taxes act will have this covered.
Talk it over with your accountants, see what they think. An agressive accountant may suggest you give it a bash and see what happens - having explained the consequences of your view not prevailing (which could be serious - you are supposed to put income from settlements on your own SA return so if you view doesn't prevail you will at the least have submitted a false return and HMRC get quite excited about this).
You can find the details of the wording in this guide:-
http://www.hmrc.gov.uk/practitioners/guide_sba.pdfComment
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