Making someone a shareholder Vs Gifting shares

[texto]

I was inclined to open the old thread but it was too big. I want to know the difference between the two - Arctic systems falls in the first category and is being chased by IR. Why the second category exempt?

If I gift some shares to my wife - she gets dividends. So why is this not a sin in IR's eyes? Gift wife some shares and pay her dividends regularly. Am I missing something here?

Also is there a limit that I can gift to wife who is only a basic taxpayer?

TIA
texto

[Sockpuppet]

I think its becuase gifting someone something is a private matter where as using the company to give them the shares involves the company so the IR can pursue for tax. Nothing against giving something of yours away.

[Lewis]

I think its becuase gifting someone something is a private matter where as using the company to give them the shares involves the company so the IR can pursue for tax. Nothing against giving something of yours away.

This is all very interesting to me. My wife doesn't work and I considered giving her some shares at incorporation but in the end I decided to await the Arctic result as it is due soon. My theory was she could always get shares later.

She is however guenuinely doing my payroll/invoicing/company secretary duties etc.. and so I am paying her a very small salary for that ( < £5000 per year). I assume this is fairly common practice.

Now if Arctic win S660 goes away so I assume I can gift her shares or she can buy them or whatever.

If Arctic lose (which I understand is most likely) I had assumed I just give up on her having dividends. But your comments above made me wonder does S660 not apply to gifted shares then? Surely that is too easy a way out.

[texto]

This is all very interesting to me. My wife doesn't work and I considered giving her some shares at incorporation but in the end I decided to await the Arctic result as it is due soon. My theory was she could always get shares later.

She is however guenuinely doing my payroll/invoicing/company secretary duties etc.. and so I am paying her a very small salary for that ( < £5000 per year). I assume this is fairly common practice.

Now if Arctic win S660 goes away so I assume I can gift her shares or she can buy them or whatever.

If Arctic lose (which I understand is most likely) I had assumed I just give up on her having dividends. But your comments above made me wonder does S660 not apply to gifted shares then? Surely that is too easy a way out.

That is exactly what I want a clear answer on. I started this thread mainly after reading this (http://www.taxationweb.co.uk/taxdoctor/4.php ).

In Arctic systems, wife was a shareholder but not bringing any money to the company. Win or lose - it does not affect gifting shares. Surely there must be something to plug this gifting shares hole??

Corporate gift shares all the time .. why doesn't everyone follow this route then instead of making wife a shareholder?

[texto]

I think its becuase gifting someone something is a private matter where as using the company to give them the shares involves the company so the IR can pursue for tax. Nothing against giving something of yours away.

Yes but sockpuppet, the end result is the same, isn't it? One manages to pay dividends to a spouse (by gifting shares). Why doesn;t everyone follow this route as opposed to making wife a shareholder?

[malvolio]

Just going back a step...

If Arctic lose (which I understand is most likely)

Where dio you get that idea? For Arctic to lose, the Law Lords would have to disregard the opinion of three very senior and well respected high court judges who ruled unanimously and very clearly that the commisioners verdict in Arctic was not only wrong in law but wrong in its interpretation of the will of Parliament
If we lost the Arctic case, it will be for political reasons. There is no rational legal basis for the appeal, HMRC are running it purely becuase they can and they do not want to be seen to be wrong.

And the appeal is costing both sides around £0.5m. HMRC can afford it (they've got all our money to play with after all) but the supporters of Arctic wouldn't be risking that kind of money without very good reason.

[Lewis]

Where dio you get that idea?

Complete heresay. I spoke to two 'professionals' recently and asked what they thought might happen. I won't name names. Both said the word on the street was that it was likely HMRC would win. But that could be complete and utter rubbish (and I hope it is) and I have no idea who makes up 'the street', if it is HMRC then no surpirses they are saying that. I have absolutely no idea. One person sounded credible though because they had intimate knowledge of dealing with S660 cases but nobody can preempt the Arctic results and I for one am going to be holding back some dividends whilst awaiting the outcome no matter what I am told. Go Arctic!

[texto]

Still wondering why the second category (gifting shares) is not a sin in IR's eyes?

[Lewis]

Still wondering why the second category (gifting shares) is not a sin in IR's eyes?

I think it probably is.

[ookook]

I'm wonderding this as well, can i just gift shares to spouse / family members and not have to worry about the Arctic case? or does legislation exist to prevent familily members benefitting from gifts of shares?