Ltd company ... things needed??

[malvolio]

Actually it's the basis of the proposed (and successfully delayed) Family Business Tax. Fully ethical behaviour, explicitly permitted by Parliament when they brought in separate taxation for man and wife but apparently heinous and unfair according to Gay Gorgon's tiny Presbyterian mind and hence has to be stamped out.

But it will bring in around £200m extra income while simultaneously upsetting 1.2 million small businesss and if enacted in the 2009 budget (as currently promised) will take effect in 2010, which is the last point where Gorgon has to call an election.

And, of course, if it comes up in this year's PBR, the PCG will be stomping all over it again and generally raising Cain in the business community.

So do you feel lucky?

[Lewis]

now THAT's the kind of information i was after. presumably i can just sell her (for example) a 20% stake for a nominal fee, and then whenever i declare a dividend i have to give her 20%?

is this what people mean by "income shifting"? should i bother doing it or does it open up a whole new world of hassle?

No need to stop at 20%, 50% is usually most tax advantageous. Plus you can pay an appropriate salary for admin (up to £5K say).

[lambrini_socialist]

i don't want to pay my wife a salary as she (currently) does no work "for" the company. of course, this doesn't include all the unpaid childcare, housework and general household admin, without which my business would be f***ed, but that's another story.

i think i'll just give her some shares.

[skelm]

i don't want to pay my wife a salary as she (currently) does no work "for" the company. of course, this doesn't include all the unpaid childcare, housework and general household admin, without which my business would be f***ed, but that's another story.

i think i'll just give her some shares.

Why throw away 5K tax free though? Get her to file papers, lick stamps whatever ...

[lambrini_socialist]

Why throw away 5K tax free though? Get her to file papers, lick stamps whatever ...

well, to be perfectly honest, she's busy enough as it is, and i'd rather do my books myself so there isn't really any work for her.

no disrespect to those who feel differently, but personally i couldn't justify creating a "fake job" for someone purely for the tax advantage.

[skelm]

Fair play. See your point. Saying that if she has absolutely nothing to with the business then what purpose other than tax reasons is she getting shares/dividends for?

Just curious

[lambrini_socialist]

Fair play. See your point. Saying that if she has absolutely nothing to with the business then what purpose other than tax reasons is she getting shares/dividends for?

Just curious

well i suppose it would be a gift. i can't pay her a salary for all the work she does at home (which supports my business), but it seems reasonable to give her a gift....albeit a gift that pays out regular sums of cold hard cash once a month.

anyway, just spoke to my accountants, they're not recommending giving shares to spousal units anyway, and as i'm a MyCo n00b i'm not keen on going against their advice.

does anyone know if the FBT legislation would apply retrospectively, if enacted?

[Cheshire Cat]

as an aside, if the bread-knife is already a higher-rate tax payer, are there any advantages to paying any money "through" her?

[malvolio]

anyway, just spoke to my accountants, they're not recommending giving shares to spousal units anyway, and as i'm a MyCo n00b i'm not keen on going against their advice.

You might consider getting some better-informed accountants then...

does anyone know if the FBT legislation would apply retrospectively, if enacted?

No it won't. Chances are it won't happen anyway - see my earlier post as to why.

[lambrini_socialist]

You might consider getting some better-informed accountants then...

hmm, i'm with one of the big names mentioned frequently on here. i'm still getting up and running, no invoices actually banked yet, so i don't want to go off-piste with my company's financial affairs until i'm feeling more confident...