Splitting divs between husband and wife

[moorfield]

While Arctic Systems was bubbling away, I kept my pay/divi below the 40% threshold and the missus took a dividend waver.

I've always understood divi waivers to be a big no no no?

50/50 split with the missus, I'm taking the money and running while I can.

[Fred Bloggs]

I've always understood divi waivers to be a big no no no?

50/50 split with the missus, I'm taking the money and running while I can.

I heard that too. My accountant saw no problem in doing it while we waited for Arctic Systems to be sorted out. Our share split is 2/3 : 1/3.

[ASB]

I've always understood divi waivers to be a big no no no?

50/50 split with the missus, I'm taking the money and running while I can.

It is one of thing HMRC look at in terms of potential S660 claims. However it depends to a certain extent how it's done. Essentially if the waived amount is retained by the company rather than being distributed to other shareholders then it is much less of a risk.

By example, company has 100k of reserves and devided to pay a dividend of 1k pershare. Shareholder 1 gets 50k and shgareholder 2 waits, so the 50k is inb the company - safer.

If the company paid a dividend of 2k per share because shareholder waived then this would be much less safe because the company could only pay that dividend because of the waiver from shareholder 2.

[SueEllen]

Can you only income shift in this way to your wife? I'm not married but am considering doing this with my long term girlfriend who I live with, as long as it wouldn't cause problems with the taxman

Nope.

People I know have one or both their parents as directors and shareholders.

I was thinking you could issue shares to anyone, but surely there must be some rules on this to stop people making each of thier kids equal shareholders, or elderly relatives.

Not at the moment. The person involved should be an adult as it gets messy.

The income shifting consultation document included anyone having shares in a company whether they were related to you or not, lived in your household or not.

[ASB]

Nope.

People I know have one or both their parents as directors and shareholders.


Not at the moment. The person involved should be an adult as it gets messy.

The income shifting consultation document included anyone having shares in a company whether they were related to you or not, lived in your household or not.

If the beneficial owner is under 18 then the asset needs to be held in a bare trust. In any event there are specific provisions in S660 which would make it pointless from a tax point of view (in fact it doesn't matter what the assets are, if they generate more than 100 quid in income the parent gets taxed).