Wife as shareholder

[gemasp]

Hi guys,

Want to make my wife shareholder of my Ltd company. Accountant says that she have to be director too? What is the problem with wife being only shareholder and keep secretary post?

Thanx

[Clare@InTouch]

None as far as I can see.

Have you asked him why he thinks she needs to be a director too?

[northernladuk]

I wish I was a director of every company that I hold shares in!!!!

If you put it like that it certainly isn't true but I think you might be missing some key advice he gave you. There are some rules around not just giving shares away, they have to be purchased at a reasonable rate so as not to look like you are avoiding tax or something on those lines and it maybe it would be easier to give your wife shares if she was a director or something.

You need to ask him some more questions and get him to explain his answers and I think all will become clear.

Also do some digging on here. Income splitting and giving out shares is a common question and many people on here have wives with shares.

[mavster07]

I wish I was a director of every company that I hold shares in!!!!

If you put it like that it certainly isn't true but I think you might be missing some key advice he gave you. There are some rules around not just giving shares away, they have to be purchased at a reasonable rate so as not to look like you are avoiding tax or something on those lines and it maybe it would be easier to give your wife shares if she was a director or something.

You need to ask him some more questions and get him to explain his answers and I think all will become clear.

Also do some digging on here. Income splitting and giving out shares is a common question and many people on here have wives with shares.

Does this mean you have to actually 'sell' the shares to your wife rather than simply allocate (give) a specific percentage of the shares to her as part of a board meeting?

[malvolio]

Does this mean you have to actually 'sell' the shares to your wife rather than simply allocate (give) a specific percentage of the shares to her as part of a board meeting?

As per Arctic, as long as the shares are genuine, have equal voting rights and are not otherwise constrained, there is no problem at all about your spouse having them no matter how they are acquired. It's only if you give away shares that do not imply co-ownership and are therefore simply a way to get dividend income might S660 come into play under the connected persons rules. That's probably what your accountant was trying to say, but you don't need to be a director or an employee, just someone with the same class of shares as the owner.

[jungleboogy]

I'm going through this process with my accountant too, just set up the company. My accountant advised I don't add my wife as a director as it brings added responsibilities. She will be added as a shareholder, I've still to decide percentage split but likely to be 70/30 rather than 50/50. I'm trying to talk her into doing some work for her share too !

[Wanderer]

I'm going through this process with my accountant too, just set up the company. My accountant advised I don't add my wife as a director as it brings added responsibilities. She will be added as a shareholder, I've still to decide percentage split but likely to be 70/30 rather than 50/50. I'm trying to talk her into doing some work for her share too !

If you split it 70/30 then you may hit the higher rate tax earlier. The only reason I can see for doing that is if your wife had some other income.

[jungleboogy]

If you split it 70/30 then you may hit the higher rate tax earlier. The only reason I can see for doing that is if your wife had some other income.

The main reason is because doing it 50/50 can attract HMRC attention in what is essentially a 1 man band. 70/30 is a safer option.

[Fred Bloggs]

The main reason is because doing it 50/50 can attract HMRC attention in what is essentially a 1 man band. 70/30 is a safer option.

After Arctic I do not think it matters. We used to be 60/40 but we have since changed it to 50/50.

[prozak]

If you split it 70/30 then you may hit the higher rate tax earlier. The only reason I can see for doing that is if your wife had some other income.

or like my wife.... a student loan....

though admitedly i've always just assumed this is a problem and never investigated whether she would need to pay back the loan from dividends.


i've got a 80/20 split.

There are also rules about majority shareholdings that you might want to consider.