Can I gift 50% share of ltd co to wife?

[BigJake]

Hi there,

If I am the sole shareholder of my ltd co. and I want to give 50% to my wife, does there need to be some kind of 'value' attached to her purchase of those shares, or can she buy them for a nominal value?

The co. has been trading 4 years, around the low 6 figure turnover each year.

Also, is there any stamp duty payable?

Hope that makes sense.

Thanks.

[sooty99]

No need for any money to be involved. Speak to your accountant. You both sign a couple of forms (for Companies House?) and all is done.

[blacjac]

Agreed, you sign the forms and keep them at head office, hold a minuted meeting board meeting to agree the transfer and then next time you do your companies annual return update the details heald at companies house to reflect the new share ownership.

Simples!

[Ardesco]

You may want to get her to pay a token fee for them however. If you don't and she starts getting large dividends all of a sudden HMRC may decide to start investigating.

I'm sure I heard of a story a while back where things like this were causing investigations and then the revenue was going after people for income shifting.

[Little'Old Me]

Rather than "gifting" the 50% have you considered, owning the shares "jointly".

Just add her name to your shares? That way you aren't giving them away!

[blacjac]

Rather than "gifting" the 50% have you considered, owning the shares "jointly".

Just add her name to your shares? That way you aren't giving them away!

What would be the advantage to this?

Gifting her 50% of the shares means that you can both earn up to the 40% bracket off dividends.
I can't imagine this to be the same if you jointly owned the same shares, although I am not an accountant....

[BigJake]

Good advice

Thanks chaps.

Fundamentally, that's great that the enemy doesn't have to provide 'consideration' for the shares.

I'll talk to the accountant to sort out the paperwork.

[ASB]

What would be the advantage to this?

Gifting her 50% of the shares means that you can both earn up to the 40% bracket off dividends.
I can't imagine this to be the same if you jointly owned the same shares, although I am not an accountant....

You would need to check, but I beleive you should find that income from jointly owned investments is now split 50/50. You used to be able to make an election to get it treated biddfernlyt but I seem to think that is now gone.

[blacjac]

Thanks ASB this might be an avenue worth exploring then...

However I suspect if this is the case the income shifting legislation would apply equally as to gifting shares (if it ever comes in)

[vetran]

AIUI if the shares have value then you can't easily gift them, best to do it at the start before you start earning money. If you already have established earnings then it may be more difficult.