Class B Shares

[TheFaQQer]

Given the recent dividend waiver case, I'd argue that a waiver is potentially more risky than alphabet shares, as it can be seen as a gift of income in its own right. Wouldn't touch it with a bargepole, not even as a one-off.

One of the main problems with the recent waiver case was that the company didn't have enough money to pay out the dividend if it wasn't waived, so therefore the dividend wasn't valid.

There is an older waiver case that I can't remember where he owned 9999 shares, the wife owned 1. When he paid a dividend to her of £30k and waived his right, it meant that the company would have needed £300million in reserves for it to be valid.

[TheCyclingProgrammer]

One of the main problems with the recent waiver case was that the company didn't have enough money to pay out the dividend if it wasn't waived, so therefore the dividend wasn't valid.

It was one of the problems but I'm not sure the case hinges on that fact alone. It was just one of the contributing factors I think. The important thing was that the judgement agreed with HMRCs view that a waived dividend represented a settlement in its own right, distinct from the original gift/transfer of shares and even if the shares did not count as a settlement or fell within the spousal exemption, the waiver, being no more than a gift of income, did not.

Either way, it seems hard to see how a waiver in OPs situation, or different share classes, would be anything but waving a big red flag saying "investigate me". Not saying he would be (I still think the risk is relatively low overall) or that it might be worth considering in some situations, but simply to save a bit of tax for just this tax year it seems a bit silly to me.

[TheFaQQer]

Either way, it seems hard to see how a waiver in OPs situation, or different share classes, would be anything but waving a big red flag saying "investigate me". Not saying he would be (I still think the risk is relatively low overall) or that it might be worth considering in some situations, but simply to save a bit of tax for just this tax year it seems a bit silly to me.

I agree.

[Craig@Clarity]

For anyone interested here is a recent case on dividend waivers in relation to settlements provisions http://www.financeandtaxtribunals.go...41/TC03188.pdf

[TheFaQQer]

For anyone interested here is a recent case on dividend waivers in relation to settlements provisions http://www.financeandtaxtribunals.go...41/TC03188.pdf

The earlier case I referred to is Buck v HMRC, which was referred to in this case (Donovan & McLaren v HMRC)