Spouse as class B shareholder - no more than 20%

[rik sherman]

PK2 are you me

Thanks, looks like I need to switch to a more liberal accountant, considering that I'm paying twice as much to Paystream to what I discovered other people paying in another thread, for them to be making mistakes on my self-assessment returns, not to mention the hassle of waiting for days to get useful advice out of them. Oh and they conveniently sold me Cater Allen ...... but I was new, young and naive.

It's gonna be a hassle as the company is registered to their address, but probably worth it..

Apart from I'm not young. I'm changing to Gorilla once I get round to it. I've had several mistakes made by them and their inhouse software pos.

[PK2]

Probably avoid the class B shares.

If she's working in the shops and making £6-7K, and you are making an efficient salary (£8.5K), your salary levels are almost equal, and you are both building state pension eligibility. Do a 50-50 split of ordinary shares and you can pay over £40K in dividends each without hitting higher rate.

If you are going to retain significant funds in the company, and build up a big reserve, you might want to make her a director so she can benefit from ER when you wind up the company.

Even if you aren't going to retain funds, if she is going to quit in the shops you might want to make her a director and pay her a salary/director's stipend of £8.5K, which will build state pension eligibility and be tax efficient.

Your post suggests she might want another job. If she is likely to look for and find a full-time job eventually, you might consider a share split such as 80-20, not because there's anything wrong with 50-50, but because it won't be efficient to pay equal dividends if she's earning, say, £30K somewhere.

Thanks a lot! Very informative and helpful for a newbie!

[WordIsBond]

If I were to type out my own response it would be negligibly different to WordIsBond's response above!

I misread this and at first thought you said negligently. Talk about a double-take!

[mudskipper]

If it's your company, you may want to remain the controlling shareholder - i.e. > 50% of the shares.

[Maslins]

If I were to type out my own response it would be negligibly different to WordIsBond's response above!

[WordIsBond]

Probably avoid the class B shares.

If she's working in the shops and making £6-7K, and you are making an efficient salary (£8.5K), your salary levels are almost equal, and you are both building state pension eligibility. Do a 50-50 split of ordinary shares and you can pay over £40K in dividends each without hitting higher rate.

If you are going to retain significant funds in the company, and build up a big reserve, you might want to make her a director so she can benefit from ER when you wind up the company.

Even if you aren't going to retain funds, if she is going to quit in the shops you might want to make her a director and pay her a salary/director's stipend of £8.5K, which will build state pension eligibility and be tax efficient.

Your post suggests she might want another job. If she is likely to look for and find a full-time job eventually, you might consider a share split such as 80-20, not because there's anything wrong with 50-50, but because it won't be efficient to pay equal dividends if she's earning, say, £30K somewhere.

[PK2]

Do a 50/50 on normal shares

Wife’s give up her shift job in the shop (I am sure she loves)

Everyone’s a winner


Sent from my iPhone using Contractor UK Forum

Thanks, looks like I need to switch to a more liberal accountant, considering that I'm paying twice as much to Paystream to what I discovered other people paying in another thread, for them to be making mistakes on my self-assessment returns, not to mention the hassle of waiting for days to get useful advice out of them. Oh and they conveniently sold me Cater Allen ...... but I was new, young and naive.

It's gonna be a hassle as the company is registered to their address, but probably worth it..

[GhostofTarbera]

Do a 50/50 on normal shares

Wife’s give up her shift job in the shop (I am sure she loves)

Everyone’s a winner


Sent from my iPhone using Contractor UK Forum

[Lance]

Get a new accountant.

Class b shares, whilst legal, are unproven in law for transferring income to a spouse.
Normal shares are proven. Google arctic systems.

[PK2]

Hi there, my first post.

After reading a few threads on this I'm still unsure exactly how to determine the correct dividend split % of my Ltd with my wife.
I've seen people say they've divided their Ltds 50% - 50% with their spouses, but my accountant advised me to give her no more than
20% of class B shares and make sure to justify it with her work for the company.

A bit of background:
-I'm making around 90k per year and exploring the options to limit being hit by higher dividend tax.
-She's on the other hand wasn't able to secure a perm job so working shifts in a shop - estimated she'll make 6-7k this year.
-Would be more preferable to use her allowance so we could use this money to help with rent/family needs as opposed to investing a lot into a pension pot.

On one hand she's from a completely different profession to me and could only help me with accounting/general support
but on the other hand being my wife I should be able to split the company however I want with her to utilise her allowance
similarly to how you can double your CT allowance through a spouse, right?

Has anyone in the same situation had any problems with a more than 80%-20% split and is it time to switch accountants?

Thanks for your opinions