If i set up ltd co and im director.. what is best way to appoint shareholders to take dividends to keep below tax levels?
What is the tax threshold for a shareholder?
What is the tax threshold for a shareholder?
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Read the guides first. -
Reading the guides would certainly help as suggested, but there are a lot of guides to get throughOriginally posted by cameron2 View Post
If your company is turning over enough to warrant thinking about passing profits on via share ownership then you really should have an accountant. If you do then ask them, they will know more about your affairs and be able to help you structure this than we can.
It isn't as straightforward as signing over shares to another party and then dishing them out dividends, HMRC will be interested if shares are passed over without some kind of liability if your company is already turning over a good amount. Also you need to bear in mind classes of shares and being able to give different dividend amounts to different share classes if you want to have some kind of flexibility.
Best advice is speak to a professional.Comment
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... and to think I am not allowed to call some people idiots....'CUK forum personality of 2011 - Winner - Yes really!!!!
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Come on be honest, you set up the sock puppet accounts just so you can ventOriginally posted by northernladuk View Post
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Call a few accountants, there's more involved in your questions than a quick answer can provide and you'd benefit from having a full conversation with someone who can cover all the various options (and all the places those questions can digress to).Originally posted by cameron2 View Post
It'll also give you a chance to compare a few service providers, which is never a bad thing.Comment
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If you wish to appoint a second shareholder, in order to ensure that your arrangement will stand up to a HMRC challenge then the other shareholder should be a spouse/civil partner whom you live with in order to avoid any CGT implications and to be compliant with S660 (settlements legislation) as tested in the Arctic Systems case in 2007. It is also important that the second shareholder holds shares of the same class, and with the same rights attached as your shares (usually ordinary shares) so not to give the other person a 'right to income'.
This arrangement will only give rise to a tax advantage if the second shareholder’s income falls into a lower marginal band – it is possible to calculate an ‘optimal split’ if both shareholders intend to remain basic rate taxpayers in the year based. The tax thresholds for dividends are exactly the same as they are for any individual – the higher rate is reached with a total income of £42,475 (2012/13 rates); however with dividend income you need to ensure that you ‘gross up’ the dividends received in order to establish which tax band your income falls into – this can be done by dividing the dividend received by 0.9.
It is always worth consulting an accountant on issues such as this – they will be able to provide you with more detailed advice and can do calculations/income illustrations to establish what the most tax efficient strategy would be whilst remaining compliant with all relevant legislation.
I hope this helps!
CraigComment
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I agree completely. I wouldn't know where to start in answering the OP question. There are too many factors to be taken into account and questions that I would have to ask.Originally posted by Clare@InTouch View Post
To the OP. I think you need to speak to an accountant (give a few a call), because this question can lead you down so many different routes.Comment
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And you have no less than 3 reputable firms to call from the last 3 posts alone!Comment
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Just to echo what all the other accountants have said you need some professional advice on this matter and this what us accountants are here for.
So call a few up and see what advice you receive.Comment
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