Can I change the share split?

[NotAllThere]

The problem is that not so good accountants sometimes don;t tell you what about the proposed behaviour is risky.

True. I'm glad my accountant is risk averse on behalf of his clients. For his own investments, he's a little more gung ho.

[Old Greg]

A good accountant should spell out exactly what the risks are and let you choose.

Questions like "Are you happy you can justify it in the unlikely event you get investigated by HMRC?" are good questions. If you are, great, if not, don't do it. But always it has to be your decision. They're never responsible.

The problem is that not so good accountants sometimes don;t tell you what about the proposed behaviour is risky.

[NotAllThere]

Tried to get advice from my accountant about changing the share split but couldn't get any valuable suggestion as those guys always over-protect themself and don't go beyond something like:

A good accountant should spell out exactly what the risks are and let you choose.

Questions like "Are you happy you can justify it in the unlikely event you get investigated by HMRC?" are good questions. If you are, great, if not, don't do it. But always it has to be your decision. They're never responsible.

[TheCyclingProgrammer]

I looked at this 10 years ago. Is there a difference between issuing new shares to spouse and gifting spouse some of your own shares? If I ever knew, it's long gone from my head...

From a settlements point of view I don't think so. Possibly from a capital gains point of view but as gifts between spouses don't attract CGT anyway probably a moot point?

[malvolio]

Did this a while back, and changed the did payouts straight away. The only real rule is to update your Company House return when it is due.

As for risk, the potential problem case is fairly arcane, but if you ensure you both have the same class of shares, that does not arise. The whole basis of the Arctic ruling was that the husband and wife are sharing the business risk and so can share the business reward however they see fit.

[Lance]

Yes you can.

I think that’s what your accountant said as well. Whilst reminding you that its your company and your risk. Which is quite right.

[Old Greg]

Should have paid more attention to IPSE's advice, shouldn't you....

but IIRC I asked my accounatnt. I've not lived in the UK for five years so some stuff gets deleted.

[malvolio]

I looked at this 10 years ago. Is there a difference between issuing new shares to spouse and gifting spouse some of your own shares? If I ever knew, it's long gone from my head...

Should have paid more attention to IPSE's advice, shouldn't you....

[Old Greg]

Whilst I wouldn't recommend frequently changing shareholdings, I'd say the risk of gifting her 5% now carries no more risk than gifting her 45% in the first place. Businesses do not generally have to justify to HMRC why they have changed shareholding.

Its hard to see a) why this would trigger any investigation - companies change their shareholdings all the time and b) what difference this would make to the effects of the settlements legislation based on the Arctic judgment.

I looked at this 10 years ago. Is there a difference between issuing new shares to spouse and gifting spouse some of your own shares? If I ever knew, it's long gone from my head...

[TheCyclingProgrammer]

Whilst I wouldn't recommend frequently changing shareholdings, I'd say the risk of gifting her 5% now carries no more risk than gifting her 45% in the first place. Businesses do not generally have to justify to HMRC why they have changed shareholding.

Its hard to see a) why this would trigger any investigation - companies change their shareholdings all the time and b) what difference this would make to the effects of the settlements legislation based on the Arctic judgment.

[rapsberry]

Tried to get advice from my accountant about changing the share split but couldn't get any valuable suggestion as those guys always over-protect themself and don't go beyond something like: "you can do it if you are happy to justify that change in case HMRC start an investigation.

I would really like to get this forum community opinion on this.

I opened my Ltd in 2017 as a 100% shareholder.
In 2018 gifted 45% of share to my wife.
This year I want to give her another 5% so our share allocation would become 50/50.

Do you guys think I should go ahead and change share allocation or it is risky?