Splitting divs between husband and wife

[FSM with Cheddar]

I've done some searching on S660 but haven't found much about people that have been investigated and one their case.

I am considering giving Mrs FSM 10% - 20% of shares in exchange for her performing website administration tasks, and a few other secretarial tasks.

Does anyone know how this would stand up to an investigation?

If this has been covered before then sorry, please point me in the direction of the relevant thread.

[Archangel]

Share allocation is nothing to do with work done for the company. I have shares in IBM, but don't do any work for them.

Does Mrs Cheese work? If not then pay her 5k for secretarial work, no tax, no NI.

If she does work then gifting her shares and paying a divvi is ok, she doesn't have to do any work for it.

The legislation in future may change, the "family business tax" may return, but its not on the books yet (thanks PCG)

[deckster]

Share allocation is nothing to do with work done for the company. I have shares in IBM, but don't do any work for them.

Does Mrs Cheese work? If not then pay her 5k for secretarial work, no tax, no NI.

If she does work then gifting her shares and paying a divvi is ok, she doesn't have to do any work for it.

The legislation in future may change, the "family business tax" may return, but its not on the books yet (thanks PCG)

Assuming of course that you can prove she actually does 5k of work for the company. Otherwise this is tax evasion, which is bad mmm'kay kids

[FSM with Cheddar]

Thanks Archangel and deckster.

Yeah I'm happy with the paying salary bit for secretarial work. I'm more interested in the justification for giving shares to the wife, and if it needs to be justified.

[FarmerPalmer]

My wife does all my admin, accounts, PAYE, VAT etc and gets a part time salary, and the same percentage of salary paid into her pension as I get.
This is what any employer would have to give.

She also owns 25% of the shares in the business. I own the other 75%.
So if the company makes a profit - she gets dividend payments.

[FSM with Cheddar]

Just to let you know. I have spoken to QDOS about this.

They said that the current risk of investigation is very low.

Also my current TLC35 policy covers for the costs of the investigation (but not paying out owed tax if lost).

[Fred Bloggs]

Everybody should be filling their boots with divis post Arctic Systems, no doubt about it. That legislation will get tightened at some point in the future, no doubt about it at all. But in the meantime, myself and Mrs Bloggs have taken the opportunity to draw out anything that was in the Ltd Co as far as possble by way of divis.

[ChimpMaster]

Everybody should be filling their boots with divis post Arctic Systems, no doubt about it. That legislation will get tightened at some point in the future, no doubt about it at all. But in the meantime, myself and Mrs Bloggs have taken the opportunity to draw out anything that was in the Ltd Co as far as possble by way of divis.

I've been off the radar on this one Fred so would appreciate an explanation on why you do this?

[Little'Old Me]

Everybody should be filling their boots with divis post Arctic Systems, no doubt about it. That legislation will get tightened at some point in the future, no doubt about it at all. But in the meantime, myself and Mrs Bloggs have taken the opportunity to draw out anything that was in the Ltd Co as far as possble by way of divis.

The govt have agreed not to bring in the "income shifting" legislation for the moment (it was supposed to come into effect on 6 April 2009) due to the Credit Crunch.

But I've just seen a copy of the wording in the new SA main tax return on Service Companies: (which I would speculate is there so they can identify who to target when the time comes???????)

"You provided your services through a service company if:
- you performed services (intellectual, manual or a mixture of both) for a client (or clients), and
- the services were provided under a contract between the client(s) and a company of which you were, at any time during the tax year, a shareholder, and
- the company's income was, at any time during the tax year, derived wholly or mainly (that is, more than half of it) from services performed by the shareholders personally.

Do not complete this box if all the income you derived from the company was employment income.


I hope you find this interesting.............

[ASB]

The govt have agreed not to bring in the "income shifting" legislation for the moment (it was supposed to come into effect on 6 April 2009) due to the Credit Crunch.

But I've just seen a copy of the wording in the new SA main tax return on Service Companies: (which I would speculate is there so they can identify who to target when the time comes???????)

"You provided your services through a service company if:
- you performed services (intellectual, manual or a mixture of both) for a client (or clients), and
- the services were provided under a contract between the client(s) and a company of which you were, at any time during the tax year, a shareholder, and
- the company's income was, at any time during the tax year, derived wholly or mainly (that is, more than half of it) from services performed by the shareholders personally.

Do not complete this box if all the income you derived from the company was employment income.


I hope you find this interesting.............

It's the most bizarre wording. I work for a multi billion international service provider. I like most of the other few thousand employess have a few shares.

We all have to ticke the box under that wording.