dividend payments - does it matter where they go?

[lambrini_socialist]

ok, supposing my company has two shareholders, and the company is paying a dividend. normally this would mean transferring funds to two different bank accounts.

what if it's more, er, convenient for both payments to be made to the same account? to pick a random and entirely hypothetical example, suppose my wife really wants her dividend payments to go into my current account rather than hers (and i want my dividend payments to also go into my account)?

is this dodgy? is there paperwork to do?

[chef]

in short, i'd say that in HMRC's eyes you have not given an equal share to all shareholders.. if your wife really wanted you to have that then your co. should pay all shareholders and they should then move it as they see fit..

the paper trail is important

however, as always, I A Not An Accoutnantr (IANAA)

[pmeswani]

ok, supposing my company has two shareholders, and the company is paying a dividend. normally this would mean transferring funds to two different bank accounts.

what if it's more, er, convenient for both payments to be made to the same account? to pick a random and entirely hypothetical example, suppose my wife really wants her dividend payments to go into my current account rather than hers (and i want my dividend payments to also go into my account)?

is this dodgy? is there paperwork to do?

I am not an accountant or a lawyer.... if you and your wife have a joint account, can't the money go in there? Speak to your accountant and see what they say.

[TheFaQQer]

Either pay it into her account and then move it across from there, or pay it into a joint account.

Anything that might upset HMRC should be avoided - particularly when it is as trivial as this.

[Gonzo]

I can't see why your wife couldn't write a letter to your company secretary stating that as a shareholder she wants all future dividend payments to be paid electronically into account number xxxxxxxx sort code xx-xx-xx. Which would be your account.

I am not an accountant though.

I would make sure that you do two separate payments though rather than combine them to keep the illusion up.

Back in the days when I used to be responsible for paying dividends out for investment funds, if an investor instructed us to make future dividends to a particular bank account we would without arguing. We didn't care where the money went, the tax voucher still had the investors' name on it and the tax liability was still theirs.

So long as your wife is happy that you get the money and she gets the tax bill

[MARTYN]

The income shifting proposals 'if and in what form they are implemented' will be relevent to this question. Paying dividends into a joint account or a spouces account may make it easier for HMRC to argue that income shifting has taken place. We'll have to wait and see what comes out.

[QwertyBerty]

I too would argue it is more sensible to pay into a spouse's account in her own name. Ditto if you pay the spouse a salary. It underlines the fact the money is going to the other half.

QB.

[expat]

ok, supposing my company has two shareholders, and the company is paying a dividend. normally this would mean transferring funds to two different bank accounts.

what if it's more, er, convenient for both payments to be made to the same account? to pick a random and entirely hypothetical example, suppose my wife really wants her dividend payments to go into my current account rather than hers (and i want my dividend payments to also go into my account)?

is this dodgy? is there paperwork to do?

The action you describe is not in itself dodgy, though the situation that leads you to ask this question might well be. Personally I don't care, but if I were Hector I would want to know more.

[lambrini_socialist]

cheers all. i'm gonna send the money to her account direct.

(aside) as far as i'm concerned there's nothing dodgy about setting up a company, running it legally to create profit for the shareholders, and giving some of my shares to my wife as a gift!

surely in the current climate, only a suicidally inept government would try and implement the FBT? hang on....oh. i see.

[SueEllen]

cheers all. i'm gonna send the money to her account direct.

(aside) as far as i'm concerned there's nothing dodgy about setting up a company, running it legally to create profit for the shareholders, and giving some of my shares to my wife as a gift!

surely in the current climate, only a suicidally inept government would try and implement the FBT? hang on....oh. i see.

Faster payments should mean that if your wife wants to transfer money (up to that bank's limit) to another account it should only take a day to do it online.