Shall I make my wife a director - "post artic"

[morphman]

Seriously though,

Wouldnt assigning a free share of your company to your wife constitute a valid s660 case, and therefore become a benefit in kind tax?

The case won was not because a share was awarded, it was because the 2 initial directors were sharing dividends from a single directors income.

If this is not true, that would interest me also, because i currently own 100% and the missus has some spare tax bracket left :-)

[Lucifer Box]

My reading of what the judges said was completely the opposite, i.e. that if the share was a gift (Mrs Arctic bought hers) there was no case to answer and that even if there were an ordinary share is not "wholly or substantially a right to income" and would be exempt for those reasons anyway.

As always, this expert legal opinion is worth exactly what you paid for it.

[drac]

little bit confused over the mechanics of issuing shares of a different class and entitlement.. if i have a company with 1000 ordinary shares of the same class (ordinary) do i simply file a form 128 to specify a different class , file a 288 to appoint her as a director and post off a note detailing the "resolution" and that is that?

thks

[Lucifer Box]

Do not give your wife a different class of shares to those you hold yourself. All 660 bets are off if you do.

[drac]

i don't follow you , i was going to allocate say 30-40% of the dividends to her and in order to do that I thought a different class of share would be the way to go.. is there another way?

clearly I have a bit of reading to do in this logistics of this with companies house etc as it all looks a little bit confusing after a 13hr day at work

[Lucifer Box]

Just give her 30-40% of the ordinary shares. If you give her anything other than ordinary shares (preference shares, or shares with no voting rights, say) it is arguable that they are "wholly or substantially a right to income" and you could then be a potentially legitimate target of a 660 attack.

As always, this expert legal opinion is worth exactly what you paid for it and you should seek professional advice from the likes of Accountax or Qdos.

[drac]

ok, still confused how to do this and would appreciate some help
1000 shares , 1 share alloted at the moment (mine) have been paying myself a dividend and both my wife and i salary
i want to split the dividends in future , say 40% her 60% me

how do i do this ?

1) do i issue the remaining 999 shares on a 60/40 split basis ?
2) issue say 9 shares , allot 5 more to me and 4 to her?
3) issue seperate class of share?

if i issue the shares am i best actually paying for them and investing some money into the business rather than gifting them and putting the payments thru the books and showing the funds on the balance sheet ?

help!

[boredsenseless]

ok, still confused how to do this and would appreciate some help
1000 shares , 1 share alloted at the moment (mine) have been paying myself a dividend and both my wife and i salary
i want to split the dividends in future , say 40% her 60% me

how do i do this ?

1) do i issue the remaining 999 shares on a 60/40 split basis ?
2) issue say 9 shares , allot 5 more to me and 4 to her?
3) issue seperate class of share?

if i issue the shares am i best actually paying for them and investing some money into the business rather than gifting them and putting the payments thru the books and showing the funds on the balance sheet ?

help!

So if you have 1000 shares and only 1 is paid up has the company been retaining the 999 equal shares of the declared dividend?

A dividend payment to my mind is paid equally based on the amount available.

I created a company with just 2 shares, split equally, both paid for, you can always split them later if needs be

[drac]

as I understood it , shares are either issued or authorised. issued means sold to share holders, voting power, dividends etc
authorised means potential shares available based on articles when the company was formed. unless a share is issued no dividend is paid ...

I hope!

still stuck over what to do with the logistics of my situation

tempted to throw £999 into the business, call up the share capital and allocate it 60/40 and show the £1000 on the balance sheet as invested share holder assets

[planetit]

So if you have 1000 shares and only 1 is paid up has the company been retaining the 999 equal shares of the declared dividend?

It doesn't have to. Dividend is paid only to the issued shares.

Drac, you need to issue another 59 shares to yourself (making 60) and 40 to your wife. Whether you should each pay for them or not I don't know. Get an accountant.