Reallocating Shares - Red Flag for HMRC S660??

[northernladuk]

What if I marry my cat?

You would have to divorce your sheep and your sister first I believe but in Wales I am sure it will be acceptable.

[psychocandy]

You would have to divorce your sheep and your sister first I believe but in Wales I am sure it will be acceptable.

My sister and my sheep are the same thing.

[Greg@CapitalCity]

So following on from that then would there be any issue in adding my son (2.5 years old) as a shareholder to the company, again in order to be able to draw more dividends from the company?Cheers

Yes, it gets caught by the settlement provisions - so any income received by your son, is treated as income for you, and as such you are taxed on it. There is an exemption for the first £100 in income paid to your son - which is a lot of money for a 2.5 year old, but not much of a tax saving for you

See TSEM4300 - Settlements legislation: settlement for minor child who is neither married nor in a civil partnership

[Old Greg]

Admin, please expect a take down notice from the Cat Protection League.

[Fandango]

Yes, it gets caught by the settlement provisions - so any income received by your son, is treated as income for you, and as such you are taxed on it. There is an exemption for the first £100 in income paid to your son - which is a lot of money for a 2.5 year old, but not much of a tax saving for you

See TSEM4300 - Settlements legislation: settlement for minor child who is neither married nor in a civil partnership

Thanks Greg for your reply that's very helpful

cheers

[contractor55]

Rather than re-allocate your shares so it shows as a gift, can you not shut down your current company and recreate a new one for the start of your next contract – if you are fortunate enough to be in such as position, and structure the shares from day 1 -Yourself 40%, partner 40%, children 20% etc- this will not show as re-allocating shares as a gift?

[Fandango]

that wouldn't change the fact that (as Greg@CapitalCity
has highlighted) any income to your child will be treated as income for yourself (except the frst £100)

So its still a non starter unfortunately

I guess if you have grown up kids/parents earning <£35k then thats another story though

[Clare@InTouch]

that wouldn't change the fact that (as Greg@CapitalCity
has highlighted) any income to your child will be treated as income for yourself (except the frst £100)

So its still a non starter unfortunately

I guess if you have grown up kids/parents earning <£35k then thats another story though

Not really, it would still be caught under S660. There is an exemption for your married partner, but not for kids/parents/girlfriend/others.

[contractor55]

Children as shareholders- even if you show you do not touch the money e.g they use it as savings ?

[malvolio]

Children as shareholders- even if you show you do not touch the money e.g they use it as savings ?

Yes. It's what S660 is all about. But even if it weren't and you put it in a trust that ensured it was never available to you, you wouldn't ever get it back, nor would you save any tax, so what would be the point?