Income Shifting

[DaveB]

[QUOTE=tim123;315404]

What happens where the spouse provided the startup capital of the company? Surely there is entitlement to dividends there.
QUOTE]

Yes, but at 5, 6 or 7% per annum,

Not at 400% per annum.

tim

Just out of interest is there any legislation that defines what are "acceptable" dividend payouts? Or does Hector get to make it up as he geoes along?

[dude69]

[QUOTE=DaveB;315408]

Just out of interest is there any legislation that defines what are "acceptable" dividend payouts? Or does Hector get to make it up as he geoes along?

The rules don't exist yet, and would only apply for tax-dodging spouses owning shares in your company.

[tim123]

[QUOTE=dude69;315418]

The rules don't exist yet, .

Yep that's what I was going to say.

My comment was a prediction of what will be allowed in future, not how it is now.

Silent investors who invest money in a company will be allowed to receive a 'normal' return on that money without triggering HMRC's wrath They will not be allowed a windfall return.

tim

[chris79]

I believe it must be commensurate. Pay to much and they will argue it is not in the interest of the company and disallow it. I was even advised paying HI £5K per year for book keeping was too much. In the end I worked out the exact time taken for her work and paid her the going rate (taken from job sites)

How does that work then, who is dictating to you as the company director how much you can pay your staff for a job well done? I'm in the same position, I pay my girlfriend a salary for doing the company accounts etc, which funnily enough is about £5.5k per year... why should we have to justify to anyone including the government how much we pay for this service? It's all within the rules and is done on PAYE.

[dude69]

How does that work then, who is dictating to you as the company director how much you can pay your staff for a job well done? I'm in the same position, I pay my girlfriend a salary for doing the company accounts etc, which funnily enough is about £5.5k per year... why should we have to justify to anyone including the government how much we pay for this service?

Because the government says so.

It's all within the rules

Not if they change the rules though.