Starting a company - section 660 implications

[ssirah]

Hi All,
I'm now considering starting up a new company, and was hoping to use my mother as the other company shareholder.

My concern is section 660. I understand the principals
around it and like most people am opposed to it. In
terms of structuring my new company I was thinking of
doing the following:

* Ensure the shareholder (my mother) is also a
director.

* Get mum to do the admin work as such a provide her with a salary.

* Ensure that both my mother and I put some share
capital into the business on start-up - say £1000.00
each of our own money. This would indicate a risk
taken on outset of all shareholders.

* Ensure my mother takes on more of an active role in
the company such as signing contracts with clients on
behalf of the new company.

My question to yourselves is firstly what do you think
of the above ? and are their any additional things I
could do on the start-up of a new company to minimise
the impact of 660

Cheers

Sandy

[Lucifer Box]

Realistically, you need professional advice rather than acting on anything a bunch of know-nothing nobodies like us tells you. All of the recent 660 action has been about people married to each other.

I take it you aren't married to your mother?

[ssirah]

Lucifer...
I'm not married to my mum...tft ! The other thing is I have taken professional advice - hence all the bits that have been mentioned. Also always nice to here views of people who may have heard snippets on the contractor grapevine either via legal people or personal networks...!

[Lucifer Box]

Thing is, ssirah, your setup is not typical. I imagine very few, if any, posters here have their mum as a director in their business.

You have done the right thing to take professional advice. Everything you have there seems sensible and appropriate. There are other things that have been mentioned as regards 660 such as not having contracts of employment, although this is nearly always in husband and wife cases.

The killer question is, does the dividend money eventually come back to you? If so, you are wide open to attack no matter what other measures you put in place.

[DimPrawn]

Marry your mum and then have her put in an offshore truss.

Works for me.

[boredsenseless]

Marry your mum and then have her put in an offshore truss.

Works for me.

And if that doesn't work you could always try an offshore trust instead!

[Dundeegeorge]

Whooooooooooosh

And if that doesn't work you could always try an offshore trust instead!

That was the sound of wordplay rushing miles overhead.
Well done, err, that's right, isn't it?

[Dr Evil]

Marry your mum and then have her put in an offshore truss.

Works for me.

No he married his mum and then put her in an offshore truss. You have to think that she needs the support.


I grant you it's kinkier than your average bear, and off topic , but one man's meat and all that. . . .

[tim123]

sandy,

I'm not sure what your problem is here.

Do you intend passing half your income to her as a tax efficient device. Or are you just going to pay her a small sum to compensate her for the work that she does?

I am sure that there are lots of companies that do the latter.

S660 is only an issue if you want to do the former.

tim

[ladymuck]

Thing is, ssirah, your setup is not typical. I imagine very few, if any, posters here have their mum as a director in their business.

My mum is my co sec but not a director. I don't pay her because she doesn't actually do anything!