Adding my Father in India as a shareholder to my Company

[Wanderer]

Is it only because the poster said it was India that all the right-wing racist "pay your taxes" replies came out?

Oh dear, the dreaded racist card.

I think you will find that we are just as right wing with anyone who tries to aggressively avoid tax through anything other than the generally accepted practices. Income splitting with someone who is not your spouse is always going to be sailing pretty close to the wind in my opinion.

The poster clearly said he would pay his father as a dividend, and as most people here know, dividends already come out of post-tax profits of the company. In other words, all company tax has already been paid.

If the director is a higher rate tax payer then they are liable to pay tax personally on their dividend income so they are avoiding tax paying tax personally by income splitting like this. If they are not a higher rate tax payer then there is no tax advantage to doing it, is there?

HMRC are always going to be suspicious that the director gets some benefit from the money or that the director would have been paying money to their father anyway and this is simply a way to avoid paying UK tax.

Feel free to ask HMRC for their opinion and see if they are "racist" too though.

[Project Monkey]

I can't understand why you need to ask what the purpose of this is. He works in the UK and sends money he earns home. Instead he wants to avoid tax by sending it straight from the company to his farther.