Reply to: Best Tax Efficient Way To Stay Under The Higher Tax Band In 2016/2017

[northernladuk]

A really good thread this one, having read through all the comments there seems to be a lot of ambiguity about what are the best solutions depending on circumstances (mainly on the salary side).

If I'm LTD and only make my spouse a 10% shareholder in the company to receive approx. £5k dividends, (which is at the end of the day to minimize my own tax) is this still a safe option?
Providing her '10%' is paid to her own account which would probably be fed into her ISA etc etc

Dunno, there is too much ambiguity and the best solution depends on circumstances as someone pointed out. Ask your accountant

[Iter]

A really good thread this one, having read through all the comments there seems to be a lot of ambiguity about what are the best solutions depending on circumstances (mainly on the salary side).
It looks like paying a salary to a spouse is potentially worth more headaches with HMRC which I can do without.

If I'm LTD and only make my spouse a 10% shareholder in the company to receive approx. £5k dividends, (which is at the end of the day to minimize my own tax) is this still a safe option?

Providing her '10%' is paid to her own account which would probably be fed into her ISA etc etc

[northernladuk]

lol! how long did that take u to find

About 15 seconds. Click on your user name, find threads and a quick browse. That was from just a few pages as well.

[css_jay99]

Oh, well I guess you know what you know pretty well then. My apologies.

How did you get on with the Capital Allowance Treatment you didn't know about?
http://forums.contractoruk.com/accou...ue-damage.html

Or getting mixed up because you didn't understand Total value of sales and all other outputs excluding any VAT
http://forums.contractoruk.com/accou...x-6-value.html

Or.. not knowing that bank interest was included in your Turnover figure...
http://forums.contractoruk.com/accou...ml#post1546606

Just saying like...

lol! how long did that take u to find

[Danglekt]

schooled

But if NLUK's client ever clocks the amount of time he spends on here winning arguements, I imagine he will look more like the lad with his head in his hands

[pr1]

Oh, well I guess you know what you know pretty well then. My apologies.

How did you get on with the Capital Allowance Treatment you didn't know about?
http://forums.contractoruk.com/accou...ue-damage.html

Or getting mixed up because you didn't understand Total value of sales and all other outputs excluding any VAT
http://forums.contractoruk.com/accou...x-6-value.html

Or.. not knowing that bank interest was included in your Turnover figure...
http://forums.contractoruk.com/accou...ml#post1546606

Just saying like...

schooled

[northernladuk]

Really?.

9yrs on I must be doing something wrong

Oh, well I guess you know what you know pretty well then. My apologies.

How did you get on with the Capital Allowance Treatment you didn't know about?
http://forums.contractoruk.com/accou...ue-damage.html

Or getting mixed up because you didn't understand Total value of sales and all other outputs excluding any VAT
http://forums.contractoruk.com/accou...x-6-value.html

Or.. not knowing that bank interest was included in your Turnover figure...
http://forums.contractoruk.com/accou...ml#post1546606

Just saying like...

[css_jay99]

If you need to ask you shouldn't be doing your accounts yourself.....

Really?.

9yrs on I must be doing something wrong

[Beatrix Kiddo]

Cool, thanks. I just want to make sure I'm asking informed questions, so I dig around a bit here and that helps me know what to ask a professional about.

[northernladuk]

Good stuff. Also just make sure you focus on the basics before the more grey aspects. The fact you are on here and active puts you way ahead of most other contractors in your situation but remember to prioritize the information. There is a lot of it to take in and there is a time and a place for much of it and that isn't always day one. Keep ploughing through the forums though.

[Beatrix Kiddo]

Not at all. It's all part of tax planning and it's never too early to do that and any decent accountant shouldn't mind. The accountant is much more likely to think you are insane to be taking tax advice from one line sweeping statements from another contractor you don't know on an internet forum. I certainly do.

Yeah, I get that but asking here would obviously never take the place of asking for proper advice. I have a big list of questions for my accountant and that one's near the top, but since the matter was being discussed here I thought it would be reasonable to ask (and I still do).

Cheers, Danglekt.

[Danglekt]

if the money goes to THEIR account, and they have other income, how can HMRC say the money you gave them went into paying the mortgage off? Obviously if you send £500 div payment and they pay £500 off a joint mortgage it's harder to argue, but if the values don't match, then what your partner decides to do once the money has gone into their account is up to them.

That said, I dont do that, so haven't had the advice around it

[northernladuk]

(I world ask an accountant, but they'd think I was insane asking hypothetical questions now since I'm still working my notice on my permie job.)

Not at all. It's all part of tax planning and it's never too early to do that and any decent accountant shouldn't mind. The accountant is much more likely to think you are insane to be taking tax advice from one line sweeping statements from another contractor you don't know on an internet forum. I certainly do.

[Beatrix Kiddo]

Just to throw in, if your other half works and uses their full allowance on salary, it's still worth giving them shares , cos they get the £5k allowance now (assuming they dont have other shares).

You've answered most of a question I have. However, what if you do that and then they pay the equivalent amount into the joint mortgage as an over-payment? I would benefit from that too, so it sounds like it might be viewed as a bit dodgy? (Although where does that end.)


(I world ask an accountant, but they'd think I was insane asking hypothetical questions now since I'm still working my notice on my permie job.)

[northernladuk]

Just to throw in, if your other half works and uses their full allowance on salary, it's still worth giving them shares , cos they get the £5k allowance now (assuming they dont have other shares).

GAAR to one side of course

When you say 'other half' do you mean wife, civil partner, unmarried partner.....................