another ltd co owning a share in my ltd co

**TheFaQQer** · 6 December 2007, 20:50

Don't see why not, but if they are an investment company then there is a different tax regime. But that's for the buying company to worry about.

**moorfield** · 6 December 2007, 21:03

Let's suppose the other ltd co is owned by my wife - can you see where I'm going with this ?

**TheFaQQer** · 6 December 2007, 21:15

WifeCo buys a share of yourCo - you'd need to get a valuation of the company to determine the price, really.

YourCo pays dividends, let's say it's a 50:50 split between you and wifeCo and you pay £25k to each shareholder.

WifeCo now has £25k income from dividends, so needs to pay CT on that income (assume 20% tax rate, but I'm not sure). WifeCo (assuming wife owns 100%) pays dividends to wife of £20k. Wife pays lower tax on that dividend (10%).

Seems like it's an overcomplicated way to take some cash out, and pay corporation tax on the profit twice.

IANAA though, but it doesn't sound worthwhile to me.

another ltd co owning a share in my ltd co