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Income Shifting with Family member not spouse

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    #11
    What would happen if, in this case, the OP made his Mother a Director in his Ltd Co, would it still be frowned upon as there is no commercial reason that the person would be a director, but as a director (even a Non-Executive Director) would be eligible to be a shareholder?
    Last edited by SimonMac; 16 December 2011, 11:17.
    Originally posted by Stevie Wonder Boy
    I can't see any way to do it can you please advise?

    I want my account deleted and all of my information removed, I want to invoke my right to be forgotten.

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      #12
      Originally posted by SimonMac View Post
      What would happen if, in this case, the OP made his Mother a Director in his Ltd Co, would it still be frowned upon as there is no commercial reason that the person would be a director, but as a director (even a Non-Executive Director) would be eligible to be a shareholder?
      I don't see it would make any difference, as the substance of the transaction is still that you're giving shares to someone purely to avoid tax. The fact that they happen to be an office holder wouldn't change that.
      ContractorUK Best Forum Adviser 2013

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        #13
        ..

        Originally posted by Clare@InTouch View Post
        I don't see it would make any difference, as the substance of the transaction is still that you're giving shares to someone purely to avoid tax. The fact that they happen to be an office holder wouldn't change that.
        The situation and its' treatment by the Revenue is far simpler than trying to understand such wrigglings mooted in the OP.

        The OP should look up Ramsay. For clarity, the statement "The House of Lords decided that where a transaction has pre-arranged artificial steps that serve no commercial purpose other than to save tax, the proper approach is to tax the effect of the transaction as a whole" should suffice.

        There is a good wiki article that details the principle in layman's terms.

        Keep invoicing, be glad you are in contract and don't jeopardise it by trying it on.

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          #14
          Cheers Clare, I assumed that would be the case but thought I'd ask anyway.

          On a related note does anyone else get the feeling that HMRC want us to pay as much tax as possible by not letting us get round with loopholes, seems a but unfair on the hard working entrepreneur!
          Originally posted by Stevie Wonder Boy
          I can't see any way to do it can you please advise?

          I want my account deleted and all of my information removed, I want to invoke my right to be forgotten.

          Comment

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