Paperwork required to split dividends with wife

[Clare@InTouch]

Bearing in mind what we have heard about your accountant so far I don't think you are handling this properly. Remember at the end of the day YOU are legally resonsible for your companies accounts, not your accountant. Claiming ignorance or trying to blame your accountant when you get investigated will not stand up. You either understand every detail of everything your accountant is doing including the risk or don't do it IMO. You have already questioned your accountant in this thread so 'supposing' he might do something isn't clever.

Totally agree - I'd recommend you go back to your accountant and specifically ask them for details of any Stamp Duty implications to the share transfer. Also ask them if there are any other issues you need to be aware of (given they should know your full financial position in regard to everything else). They should be happy to answer any questions you have in as much detail as you want. If they aren't, then you have a problem.

[Wanderer]

He said he had filled out a form so it's not clear if he has or hasn't done required paperwork...

Funny isn't it. Everyone talks about having to do it the "right" way and have the "right" paperwork in place but no one seems to know exactly what that is.

So come on, surely one of the accountants here can give a proper answer on this one.

For example, a company with a single director who is also the sole shareholder decides to gift ordinary share(s) to their spouse. Do they just file the form (SH01?) with companies house and the job's done? I can't see that you would need a minuted meeting of shareholders to decide to do this because there is only one director/shareholder....

Would the share(s) need to be paid for or can they just be gifted to the spouse?

[ThomserveBAS]

Can I just check that this is a different scenario to incorporating the company with a 50/50 split? i.e. from day one, myself and my wife are both directors with a 50/50 split in 100 shares. Reading this thread makes me wonder if I've missed some paperwork outside of the initial incorporation process but my accountants haven't flagged anything (but as mentioned it is my responsibility at the end of the day hence wanting to double check).

[Clare@InTouch]

Funny isn't it. Everyone talks about having to do it the "right" way and have the "right" paperwork in place but no one seems to know exactly what that is.

So come on, surely one of the accountants here can give a proper answer on this one.

For example, a company with a single director who is also the sole shareholder decides to gift ordinary share(s) to their spouse. Do they just file the form (SH01?) with companies house and the job's done? I can't see that you would need a minuted meeting of shareholders to decide to do this because there is only one director/shareholder....

Would the share(s) need to be paid for or can they just be gifted to the spouse?

SH01 is to issue a new share. In this case it's a transfer, so you just need a stock transfer form J30.

Shares can be gifted or paid for. Often it's gifted as that means there's no stamp duty.

The company share register and register of members have to be updated and minuted, although in practice many small companies don't keep an official Register as they did in the 'olden days' of paper based records.

[Clare@InTouch]

Can I just check that this is a different scenario to incorporating the company with a 50/50 split? i.e. from day one, myself and my wife are both directors with a 50/50 split in 100 shares. Reading this thread makes me wonder if I've missed some paperwork outside of the initial incorporation process but my accountants haven't flagged anything (but as mentioned it is my responsibility at the end of the day hence wanting to double check).

You're fine. If it's done on incorp then there's no transfer so no additional paperwork.

[Greg@CapitalCity]

SH01 is to issue a new share. In this case it's a transfer, so you just need a stock transfer form J30.

Shares can be gifted or paid for. Often it's gifted as that means there's no stamp duty.

The company share register and register of members have to be updated and minuted, although in practice many small companies don't keep an official Register as they did in the 'olden days' of paper based records.

Sounds good to me. Grab a J30 online (try http://www.sfsgo.com/documents/J30.pdf), complete it, and keep with your company records. As the shares are gifted, consideration is nil, which keeps you out of stamp duty territory. Also draft up some minutes to confirm the arrangement (ie Party A is gifting x ordinary shares to Party B....). You can also complete a company annual shuttle return to lock in the shareholder changes, or else just wait until your next annual shuttle return rolls around.

[mickael28]

And if we need to increase the number of shares as well, do we need to pay for them from our personal bank account or that's not required? I've not been asked to pay anything even though the number of shares have increased and the price per share has been kept the same, so wondering where they're coming from...

(Accountant on holidays for a little while, so I cannot clarify with her at the moment)

[northernladuk]

And if we need to increase the number of shares as well, do we need to pay for them from our personal bank account or that's not required? I've not been asked to pay anything even though the number of shares have increased and the price per share has been kept the same, so wondering where they're coming from...

(Accountant on holidays for a little while, so I cannot clarify with her at the moment)

What do you mean the price per share has not changed? Why would you think you have to pay for them from your personal account as well? You are creating the share by making each one worth less of your company. If you currently have 1 you will be creating 10 that are worth a tenth of the company surely. You can set the price of the shares to anything you want within reason. It's all just a paperwork exercise seems it is just an avoidance exercise.

If you are looking at embarking on a strategy that some would argue is risky wouldn't it have been a good idea to research these questions first? You are ultimately responsible for your actions not your accountant.

[mickael28]

What do you mean the price per share has not changed? Why would you think you have to pay for them from your personal account as well? You are creating the share by making each one worth less of your company. If you currently have 1 you will be creating 10 that are worth a tenth of the company surely. You can set the price of the shares to anything you want within reason. It's all just a paperwork exercise seems it is just an avoidance exercise.

If you are looking at embarking on a strategy that some would argue is risky wouldn't it have been a good idea to research these questions first? You are ultimately responsible for your actions not your accountant.

I think we are doing the correct thing but I'm not sure how the new shares are created.

My first accountant just created a single share of £1 in the company, so now that I needed to split it up the new accountant suggested to increase them to £100 (keeping the same price of £1 per share) and as a result somehow she's now created 99 new shares of £1 of which I own 50 and my wife owns 50 as well, but we have not paid anything for those shares so I was thinking along the lines of that maybe the company can do whatever (and create new shares just like that) but at the same time I suppose that people who want some new shares should pay for them?

Or can the company just give 'free' shares just like that?

[northernladuk]

You really need to think carefully before going through with this. Hmrc are happy with it where there is a business justification and tax avoidance isn't the sole purpose. How on earth can there be a business justification when you understand so little? They will have your trousers round your ankles bent over the desk faster than you can say 'my accountant said it was ok'