Register of members & share ledger

[nombie]

Thanks you all that have replied.

Just to settle the score on the settlement legislation.
My girlfriend (company secretary) contributes to the company by:-

1) Preparing invoices, reconciles bank transfers, pays bills, ensures membership / insurance / subscriptions are up to date etc i.e general book keeping duties
2) Prepares PPE ensures I have the correct PPE for the contract / environment.
3) From time to time carries out simple data input tasks I give her.
4) Undertakes general admin duties I ask her to perform
5) Looks dam pretty while doing the above.
6) Money is paid into a joint account under her name which she has access to and uses regularly.

She has signed a "contract" if you would like to call it that underpinning her duties as company secretary.

In answer to my question would I fill in as follows for my GF (She has the 30 out of the 70/30 split)

Share type...........Ordinary
Denomination........£1
Current Holding.....30

I can modify the register if needs be to reword the above

ALL HELP APPRECIATED.

[Craig at Nixon Williams]

In answer to my question would I fill in as follows for my GF (She has the 30 out of the 70/30 split)

Share type...........Ordinary
Denomination........£1
Current Holding.....30

This correct based on what you have said.

I would still recommend speaking to your accountant about the arrangement though...

Craig

[nombie]

This correct based on what you have said.

I would still recommend speaking to your accountant about the arrangement though...

Craig

I have spoken to my accountant and he has advised not to gift more than 30, i.e split 70/30 as the proportion of the share holding must to a degree reflect her contribution as company secretary etc.

[DirtyDog]

Thanks you all that have replied.

Just to settle the score on the settlement legislation.
My girlfriend (company secretary) contributes to the company by:-

1) Preparing invoices, reconciles bank transfers, pays bills, ensures membership / insurance / subscriptions are up to date etc i.e general book keeping duties
2) Prepares PPE ensures I have the correct PPE for the contract / environment.
3) From time to time carries out simple data input tasks I give her.
4) Undertakes general admin duties I ask her to perform
5) Looks dam pretty while doing the above.
6) Money is paid into a joint account under her name which she has access to and uses regularly.

She has signed a "contract" if you would like to call it that underpinning her duties as company secretary.

Good luck defending her 30% ownership of the company based on that.

[DirtyDog]

I have spoken to my accountant and he has advised not to gift more than 30, i.e split 70/30 as the proportion of the share holding must to a degree reflect her contribution as company secretary etc.

And you believe that you can argue that what she contributes is 30% of the business? And if she wasn't your girlfriend, you'd offer the same equity to someone who was a normal employee, based on that? Either the business is small, or you'd fail any s660 investigation.

Fingers crossed that you remain together, though - you see enough on CUK about divorce and the wife having a stake in the business, let alone a boyfriend / girlfriend relationship.

[Clare@InTouch]

Thanks you all that have replied.

Just to settle the score on the settlement legislation.
My girlfriend (company secretary) contributes to the company by:-

1) Preparing invoices, reconciles bank transfers, pays bills, ensures membership / insurance / subscriptions are up to date etc i.e general book keeping duties
2) Prepares PPE ensures I have the correct PPE for the contract / environment.
3) From time to time carries out simple data input tasks I give her.
4) Undertakes general admin duties I ask her to perform
5) Looks dam pretty while doing the above.
6) Money is paid into a joint account under her name which she has access to and uses regularly.

She has signed a "contract" if you would like to call it that underpinning her duties as company secretary.

In answer to my question would I fill in as follows for my GF (She has the 30 out of the 70/30 split)

Share type...........Ordinary
Denomination........£1
Current Holding.....30

I can modify the register if needs be to reword the above

ALL HELP APPRECIATED.

The shares held being a reflection of the work she does is an arbitrary figure that's entirely misleading in my view (There's no commercial aspect to giving dividends to a company secretary - would you give 30% of your share capital to an unconnected third party who carried out the same tasks? And why 30%? May as well simply split 50:50). The reward for work carried out is a salary, not dividends.

The fact that the dividends go into a joint account which you both use makes it more risky in my view, as the end result is the use of her tax allowances to reduce the overall tax payable by you.

[northernladuk]

I know that you have expressed your opinion on here previously - my position on this issue remains as above.

To the OP - in view of what has been said, if you do have any questions about this topic then it would definitely be worth speaking to your accountant for further advice.

Craig

My account also shares the same opinion and said don't touch it for settlement reasons and also to keep girlfriends away from the business. You split up and you are royally ****ed. We have enough posters on here stuck with exs that still own half their business.

Any investigation will see straight through those reasons as well. They aint stupid.

Paid in to shared account? Lol... talk about taking a risky approach to a risky situation. There are so many angles for HMRC to get you here your only hope is to never get caught. There is absolutely nothing about this setup that doesn't scream contrived setup to gain a tax advantage and you can guess HMRCs view of that.

[TheCyclingProgrammer]

What's all this about "justifying" the share? No justification is needed. A bounteous arrangement, as such, creates the settlement. This in itself is not enough to be "caught". The legislation couldn't be clearer about that.

Put it this way, the less connected you are to the receiver of the shares, the harder it would be for HMRC to claim the settlor has retained an interest, so long as the transfer was unconditional.

I could, if I wanted, choose a random stranger and give them a share in my company. Ordinary shares, no strings attached. I'll never see those shares, or the resulting dividends again. It's clearly a settlement as it's not an at arms length, commercial transaction. But there is not a chance that HMRC could contrive to tax those dividends on me, the settlor.

[TheCyclingProgrammer]

There is absolutely nothing about this setup that doesn't scream contrived setup to gain a tax advantage and you can guess HMRCs view of that.

No more contrived than most husband/wife splits though. And whilst we all know what HMRCs view of that is, to date they've not been able to do anything about it.

Personally, I'd avoid paying the dividends into a joint account too, but that's just erring on the side of caution. In the event if a (very unlikely) investigation you don't want to give HMRC any unnecessary ammo.

I look forward to an HMRC test case on income splitting between unmarried partners; it would be great to have some definitive case law on the matter so everybody can stop speculating and coming up with their own interpretations of the law. At least people would really know where they stand.

I suspect I'll be waiting a long time though...

[northernladuk]

No more contrived than most husband/wife splits though. And whilst we all know what HMRCs view of that is, to date they've not been able to do anything about it.

Personally, I'd avoid paying the dividends into a joint account too, but that's just erring on the side of caution. In the event if a (very unlikely) investigation you don't want to give HMRC any unnecessary ammo.

I look forward to an HMRC test case on income splitting between unmarried partners; it would be great to have some definitive case law on the matter so everybody can stop speculating and coming up with their own interpretations of the law. At least people would really know where they stand.

I suspect I'll be waiting a long time though...

Yes it is. GF is different to husband and wife. For all intensive purposes she is a stranger tax wise. Most definitely need a case to settle it. I would think, as I just mentioned, an unmarried partner would be considered as a stranger just as they are for many other tax situations would. No point in having any legislation if they were happy with that.