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Previously on "New Dividend Tax 2016"

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  • ASB
    replied
    It may also be worth pointing out that anybody under 18 cannot own shares anyway. As such they need to be in trust anyway. (It is a practical rather than legal thing. Articles often prohibit under 18s as shareholders and banks often will not provide banking services because they may be unable to enforce any contracts entered into or obtain adequate shareholder consent).

    it may be possible to do something with a discretionary accumulation and maintenence trust to non specific beneficiaries but that would probably still be difficult where the settlor was a parent. An interest in possession arrangment may also be useful.

    A simple bare trust would probably be the most common way.

    also only really any good for a permanent arrangement since it seems reasonable that the property would be required back at some future point.

    if the kids purchased the shares - at a fair market price - from money which was their own resources - I.e. in no way from parental gifts then it should be possible to show there is no settlement.

    actually establishing this would be hugely expensive since it would sooner or later get challengeg by hmrc.
    Last edited by ASB; 3 January 2016, 09:44.

    Leave a comment:


  • TheCyclingProgrammer
    replied
    Whoever told you is an idiot. I suggest you (and they) read s629 of the settlements legislation.

    TSEM4300 - Settlements legislation: settlement for unmarried minor child: settlements legislation

    The £100 rule you speak of does exist though, but it doesn't really help you unless you intend to restrict their dividends somehow to £100/year.

    http://www.hmrc.gov.uk/manuals/tsemmanual/tsem4310.htm
    Last edited by TheCyclingProgrammer; 3 January 2016, 01:56.

    Leave a comment:


  • northernladuk
    replied
    Originally posted by tudou View Post
    However I have read elsewhere that there is a £100 rule, so I am not sure if I can still benefit from doing this?
    If you managed to read this how come you didn't read further and understand it better? Plenty of articles on it on google.. like this one...

    Contractor Doctor: Can I give children shares in my contracting company to save tax?

    Leave a comment:


  • jamesbrown
    replied
    Originally posted by mudskipper View Post
    Who told you that?
    His kids

    Leave a comment:


  • northernladuk
    replied
    Don't forget to get an accountant and get some proper advice.

    Leave a comment:


  • mudskipper
    replied
    Originally posted by tudou View Post
    ....I was told that I could add my two children (both are under 10 years old) as share holders...
    Who told you that?

    Leave a comment:


  • tudou
    replied
    Many thanks for the response! Looks like it's a no go then...

    Leave a comment:


  • Waldorf
    replied
    Don't even think about it.

    You would be caught out by the income shifting rules, Google Arctic Systems. The exemption was only for spouses, kids are not covered.

    Additionally, if you gift assets to your kids then any income in excess of £100 should be declared on your tax return, so you save nothing.

    Leave a comment:


  • tudou
    started a topic New Dividend Tax 2016

    New Dividend Tax 2016

    Hello Guys,

    I will be doing my first contract in the new year, and I am now setting up my limited company. Considering the change in the dividend tax, I was told that I could add my two children (both are under 10 years old) as share holders, so I can make the best use of the £5,000 dividend tax allowance. However I have read elsewhere that there is a £100 rule, so I am not sure if I can still benefit from doing this?

    Will appreciate if anyone can give any advice.

    Thanks.

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