Paying Dividends

**kaiser78** · 8 August 2009, 18:17

Originally posted by AlfieA View Post

My limited company has been in operating for a number of years and has issued regular dividends and has retained profits. My wife & I currently have 1 share each (out of 100). In future, I would like my wife to receive more dividend than me (or even all the dividends) to use up her full base rate limit.
What tax/legal issues are there to consider if I was to gift her my share or she was just allocated more shares?
What if I was to set up a new Ltd company where she was the only shareholder for future trading?
Or is there a better/safer approach to avoiding exposure to income shifting tax risk?
(I am not worried about the risk of her running off with all the loot.)

Have you engaged the services of an accountant ? He will be able to provide all the necessary guidance. If you set up your share holding correctly you can pay minimal tax - they will be able to guide accordingly.

**chris79** · 8 August 2009, 19:42

Check out S660A - it's a piece of legislation which the tax man may/can use against you if he thinks you moved -your- income to someone else for the purpose of tax efficiency.. Also read up on the 'Arctic' case which the Government recently lost..

They were to introduce some new income shifting laws this year to prevent people doing this but they got put on hold. Best off asking for some professional advice on this as the tax man may be knocking on your door in the near future.

**malvolio** · 8 August 2009, 20:22

There's a detaled guide on the PCG website if you're a member, but I asked much the same question myself recently of Geoff Jones (who knows a little about this

). In essence, within a marriage, while it's marginally better for the other half to buy their share it makes damn all difference in reality.

Also, just to be clear, Income Shifting is dead and S660a is not applicable to married couples.

**Fred Bloggs** · 9 August 2009, 09:47

Originally posted by malvolio View Post

There's a detaled guide on the PCG website if you're a member, but I asked much the same question myself recently of Geoff Jones (who knows a little about this

). In essence, within a marriage, while it's marginally better for the other half to buy their share it makes damn all difference in reality.

Also, just to be clear, Income Shifting is dead and S660a is not applicable to married couples.

For now............

**TroubleAtMill** · 9 August 2009, 13:26

Hoping not to hijack the thread but most of the discussion for income shifting (I really hate that term

) is with regards to one's spouse. What, if any, are the differences if I want to make a sibling, or anyone else that matter, a shareholder by selling them one of the remaining 999 shares? For example, siblings who are still at uni or overseas and therefore aren't liable for income tax.

**PhilAtBFCA** · 10 August 2009, 06:23

TroubleAtMill

Thats what S660 is all about, you cant do it basically, and the income will be taxed as yours.

Legislation regarding spouses is different.

Phil

**TroubleAtMill** · 10 August 2009, 06:54

Originally posted by PhilAtBFCA View Post

TroubleAtMill

Thats what S660 is all about, you cant do it basically, and the income will be taxed as yours.

Legislation regarding spouses is different.

Phil

Thanks Phil. Not great news

, but thanks for the info.

**AlfieA** · 13 August 2009, 17:26

Originally posted by chris79 View Post

Check out S660A - it's a piece of legislation which the tax man may/can use against you if he thinks you moved -your- income to someone else for the purpose of tax efficiency.. Also read up on the 'Arctic' case which the Government recently lost..

They were to introduce some new income shifting laws this year to prevent people doing this but they got put on hold. Best off asking for some professional advice on this as the tax man may be knocking on your door in the near future.

Great bedtime reading. So it appears that gifts of ORDINARY shares between spouses are exempt from S660A - just the job.

Paying Dividends