This year, I got about £15K from redundancy/previous employment, and then dear wife got salary of £16K from her own employment.
So, it made sense to not pay myself a salary but to split the dividends 50/50 to maximise lower tax bracket for us both. So far so good, could declare dividend (grossed up) of approx 52K (26K each) and neither us exceeds 40% bracket but both pretty close.
Next year, my salary from ltd will be £8K, but wife will still earn £16K from her job, so I was thinking 50/50 is not so good. If we do it 50/50, then potentially after 52K shes reached her limit and I'm still 8K below. Any further divs accrue additional tax for year.
So, ideally (Assuming 60K gross available) I want to have 34K, the Mrs 26K. That way be both go right up to the limit. However, would need 43/57 split for this to happen. (OK probably 45/55 is less hassle).
Accountant isnt too keen and says it looks dodgy if you keep changing shareholder amounts every year. Any opinion on this? I suppose in a way it is avoiding tax by using the company split to your advantage.
Surely, its OK to have 50/50 to start with then change just the once to 55/45? Or not?
So, it made sense to not pay myself a salary but to split the dividends 50/50 to maximise lower tax bracket for us both. So far so good, could declare dividend (grossed up) of approx 52K (26K each) and neither us exceeds 40% bracket but both pretty close.
Next year, my salary from ltd will be £8K, but wife will still earn £16K from her job, so I was thinking 50/50 is not so good. If we do it 50/50, then potentially after 52K shes reached her limit and I'm still 8K below. Any further divs accrue additional tax for year.
So, ideally (Assuming 60K gross available) I want to have 34K, the Mrs 26K. That way be both go right up to the limit. However, would need 43/57 split for this to happen. (OK probably 45/55 is less hassle).
Accountant isnt too keen and says it looks dodgy if you keep changing shareholder amounts every year. Any opinion on this? I suppose in a way it is avoiding tax by using the company split to your advantage.
Surely, its OK to have 50/50 to start with then change just the once to 55/45? Or not?
