Dividend to only one shareholder

[Iron Condor]

My company has two shareholders owning the same class of share.

I need to pass a divi but only to one of the share holders on a one off basis.

Had i known i needed to do this in advance i would have stuctured the shares differently..

Does anyone know if it is possible to do this.

[ASB]

My company has two shareholders owning the same class of share.

I need to pass a divi but only to one of the share holders on a one off basis.

Had i known i needed to do this in advance i would have stuctured the shares differently..

Does anyone know if it is possible to do this.

Yes it is. The other shareholder will need to agree to a dividend waiver first. Also it could be viewed as a bit of a red rage to a bull in terms of the settlements legislation in general. This may or may not be a problem depending upon your circumstances.

[moorfield]

Yes it is. The other shareholder will need to agree to a dividend waiver first. Also it could be viewed as a bit of a red rage to a bull in terms of the settlements legislation in general. This may or may not be a problem depending upon your circumstances.

Dividend waiver is a big NO NO I thought.

But I may be wrong phone HMRC on 0800 788 887 and ask them.

[ASB]

Dividend waiver is a big NO NO I thought.

But I may be wrong phone HMRC on 0800 788 887 and ask them.

I did say it could be a red rag to a bull in terms of the settlements legislation, however in the case of the OP this is probably not particularly significant, also given the state of the Arctic case it's a bit unclear.

Ultimately if it is a settlement (and that is open to debate) then it is potentially charged to the settlors SA (which would presumably be the other shareholder).

The only point at which this is likely to reduce the overall tax receipts is if the settlor is a higher rate taxpayer and the OP isn't. This could of course be the case.

In any event this make no difference as to whether you can do it or not, simply what the tax consequences of it might eventually be.

Some HMRC guidance is here.
http://www.hmrc.gov.uk/manuals/tsemmanual/TSEM4220.htm

[ratewhore]

Of course, you could change the shareholders or shareholdings then pay the dividend after that

[ASB]

Of course, you could change the shareholders or shareholdings then pay the dividend after that

Potential issue with that is the price at which the transfer takes place. If there are significant assets within the company (and obviously there at least the dividens worth) then HMRC will tend to want to ensure that is taken into account in the sale price. This can trigger a CGT charge.