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Splitting shares with spouse- optimal setup

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    #11
    But then there is the issue he's been paying dividends to an unmarried partner for 4 years. I can't believe that gifting her shares for nothing right from the being means he 'may' be OK.

    12k to cover directors responsibilities? OP isn't doing a great job of those responsibilities let alone his gf and claiming 12k for it. Complete piss take.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

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      #12
      Originally posted by northernladuk View Post
      But then there is the issue he's been paying dividends to an unmarried partner for 4 years. I can't believe that gifting her shares for nothing right from the being means he 'may' be OK.

      12k to cover directors responsibilities? OP isn't doing a great job of those responsibilities let alone his gf and claiming 12k for it. Complete piss take.
      A. He didn't gift her shares, they each invested in a new start-up. The shares were of no value when the company started, and anyway it wasn't a gift. She's reaping the rewards of her savvy investment decision, blah, blah, blah. He's not been wise to leave himself in the position he's in but it's not as bad as if he'd done it after the shares already had value.
      B. For the same reason that 'market rate' defines what he can pay her for bookkeeping, 'market rate' defines what he can pay a non-exec director. Personally, I'd recommend £8.4K, the tax savings between there and £12K are not that significant and it makes payroll easier.

      If he gets killed in a car accident, she'll find out, as the sole surviving director, that she needs to figure out what to do about accounts, closing the company, etc., and she'll earn her money. If he raids the CT funds and runs off with some sweet young thing, or just fails in other corporate responsibilities, she'll find out that she's signed up for some legal responsibilities to go along with the nice salary. Whether HE is doing a good job with his responsibilities or not, SHE is held legally responsible if she becomes a director. If he's not been doing a good job on this, all the more reason to hire someone else to look over his shoulder. There should be compensation for that, and the difficulty in quantifying that means that HMRC is unlikely to ever (and as far as I know, never has) challenge this level of director's compensation. There are business reasons for having a non-exec director even in a very small company, and business reasons for paying for it.

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        #13
        Originally posted by skysies View Post
        Well, I can definitely lower the salary if that doesn't seem justified. One main consideration is to qualify for the 30 hour free childcare. My wife has to work at least 16 hours a week on the minimum wage.

        Which is around £525 per month, or £6300 a year. I guess that salary would seem reasonable?
        Originally posted by skysies View Post
        I have been giving her the dividends for around 4 years. Now it's a new accountant that recommended making her a director and paying her a salary. Btw, we are not married, hopefully that won't be an issue?
        Make your mind up

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          #14
          Originally posted by skysies View Post
          I have been giving her the dividends for around 4 years. Now it's a new accountant that recommended making her a director and paying her a salary. Btw, we are not married, hopefully that won't be an issue?


          Not being a spouse and getting divis for 4 years is an issue. A much bigger issue that paying a salary for doing nowt.
          See You Next Tuesday

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