Reply to: Income splitting with girlfriend (not spouse)

[GhostofTarbera]

Yes, it's a good point. I'm proposing this month and we will likely be married at some point next year. COVID has delayed a lot of our plans. My intention is to stay together with her until death do us part, so the business has very much become a family endeavour. She has given up her career to raise our children.

Thanks all for the comments. I've been using FreeAgent to date, but it seems like an accountant will be worth spending a bit of money on to get this sorted correctly? I was going to use your referral code for Gorilla Accounting northernladuk, until you doubted my honesty

Craig@Clarity is it fair to assume this is becoming a more common set up for your clients? Marriage seems to be on the decline and co-habiting on the rise. Wondering how many people have had a similar idea.

don’t do it man !!!

this year love is next year fish and chip wrapper !!

say goodbye to girlfriend benefits

[northernladuk]

It won't remember tax law is entirely different to all other parts of the law and as shown by the Arctic case, HMRC don't want the reward of risks taken (i.e. profits from a company) shared by married partners let alone unmarried ones.

True dat.

[northernladuk]

harsh.... have we met?

I would be willing to split but don't want to get in a bunfight over who gets referral fees.
The new Gorilla referral system is a pain anyway. But it is £200 right now rather than £100.

How about we don't tell the OP that. Bung him 50 quid and you we can spend the rest at your local hangouts? Show me how the big boys play.

[northernladuk]

Which is why employing her rather than a shareholding may be more useful.
At least then there would be a contract of employment, list of responsibilities and duties, annual appraisal, etc.
Set her up with a company email address, make her the main correspondent with the accountant, her responsibility to deal with company mail, maintain the company office, its stationery, etc.

This can include a bonus scheme and eye-watering pension contribution, as advised by an accountant.

And redundancy

[eek]

Without a doubt.


It's just the way I am. Most posts we get on here either miss key information or the OP is being liberal with the truth to get the answer they want so if I can cover the negative aspects the positive ones just roll in. 99% of wife working for the company post turn out she's doing a bit of filling according to the OP, and when pressed she isn't even doing that hence the default to them not doing anything which is usually right.

BTW I split my referrals so you get half. Lance will just take it all and blow it on hookers and coke. Just mention me and remind them we agreed half if you want.

That is true, the problem is the law hasn't caught up to that fact yet, and probably won't for years, if ever, for some situations.

It won't remember tax law is entirely different to all other parts of the law and as shown by the Arctic case, HMRC don't want the reward of risks taken (i.e. profits from a company) shared by married partners let alone unmarried ones.

[Lance]

BTW I split my referrals so you get half. Lance will just take it all and blow it on hookers and coke. Just mention me and remind them we agreed half if you want.

harsh.... have we met?

I would be willing to split but don't want to get in a bunfight over who gets referral fees.
The new Gorilla referral system is a pain anyway. But it is £200 right now rather than £100.

[LondonManc]

They all say they do.

Which is why employing her rather than a shareholding may be more useful.
At least then there would be a contract of employment, list of responsibilities and duties, annual appraisal, etc.
Set her up with a company email address, make her the main correspondent with the accountant, her responsibility to deal with company mail, maintain the company office, its stationery, etc.

This can include a bonus scheme and eye-watering pension contribution, as advised by an accountant.

[northernladuk]

Thanks all for the comments. I've been using FreeAgent to date, but it seems like an accountant will be worth spending a bit of money on to get this sorted correctly?

Without a doubt.

I was going to use your referral code for Gorilla Accounting northernladuk, until you doubted my honesty

It's just the way I am. Most posts we get on here either miss key information or the OP is being liberal with the truth to get the answer they want so if I can cover the negative aspects the positive ones just roll in. 99% of wife working for the company post turn out she's doing a bit of filling according to the OP, and when pressed she isn't even doing that hence the default to them not doing anything which is usually right.

BTW I split my referrals so you get half. Lance will just take it all and blow it on hookers and coke. Just mention me and remind them we agreed half if you want.

Craig@Clarity is it fair to assume this is becoming a more common set up for your clients? Marriage seems to be on the decline and co-habiting on the rise. Wondering how many people have had a similar idea.

That is true, the problem is the law hasn't caught up to that fact yet, and probably won't for years, if ever, for some situations.

[Lance]

Yes, it's a good point. I'm proposing this month and we will likely be married at some point next year. COVID has delayed a lot of our plans. My intention is to stay together with her until death do us part, so the business has very much become a family endeavour. She has given up her career to raise our children.

Thanks all for the comments. I've been using FreeAgent to date, but it seems like an accountant will be worth spending a bit of money on to get this sorted correctly? I was going to use your referral code for Gorilla Accounting northernladuk, until you doubted my honesty

Craig@Clarity is it fair to assume this is becoming a more common set up for your clients? Marriage seems to be on the decline and co-habiting on the rise. Wondering how many people have had a similar idea.

why not use my referral code for Gorilla then?

[BigLadFromBeeston666]

if you are considering a commitment of a percentage of your business and future earnings, then why not consider getting married?

Forget the romance.. It's a contract between two people to share everything, and has the benefit of being recognised in law with certain protections (both ways).

Yes, it's a good point. I'm proposing this month and we will likely be married at some point next year. COVID has delayed a lot of our plans. My intention is to stay together with her until death do us part, so the business has very much become a family endeavour. She has given up her career to raise our children.

Thanks all for the comments. I've been using FreeAgent to date, but it seems like an accountant will be worth spending a bit of money on to get this sorted correctly? I was going to use your referral code for Gorilla Accounting northernladuk, until you doubted my honesty

Craig@Clarity is it fair to assume this is becoming a more common set up for your clients? Marriage seems to be on the decline and co-habiting on the rise. Wondering how many people have had a similar idea.

[northernladuk]

Even though the OP has said she does, which is why someone else suggested employing her instead of the usual married shizzle? Come on, read the thread.

They all say they do.

[Craig@Clarity]

Most questions can be answered with a "yes you can". How to account for the tax aspect of it and admin is usually the follow up. In your case, you can make her an equal shareholder. You're approaching it from the position she is doing significant work for the company and you'd like to retain her services. As others have mentioned, you could simply put her on a salary (get a contract of employment issued). If you want to make her a shareholder, as you say, you'll need to value the shares. How much can I buy a share in your company? Valuation can be subject but perhaps look at a percentage being applied to annual turnover or the balance sheet figure. Then complete a share transfer form, get her to pay the money over to you, pay the stamp duty if applicable and get a shareholders agreement in place. The shareholders agreement will protect the business and yourself in case anything happens in the future.

[LondonManc]

Except when it's just a tax dodge and she isn't doing a single thing for the company... which is probably the case.

Even though the OP has said she does, which is why someone else suggested employing her instead of the usual married shizzle? Come on, read the thread.

[northernladuk]

There is no problem with paying your girlfried as an employee of the company and deducting appropriate PAYE, erNIC and eeNIC.

Except when it's just a tax dodge and she isn't doing a single thing for the company... which is probably the case.

[northernladuk]

You really are better off discussing this with your accountant. They will know your situation much better than us and can advise the pros and cons more accurately.

But, IMO, keep your girlfriend out of it. We've plenty of threads where this has ended badly for people. We've enough threads just about married people let alone unmarried although in this day and age actually been married compared to unmarried is starting to merge. More and more people don't get married and can still be together for life... but lets take the assumption (until told otherwise) your girlfriend is not yet a life long commitment.

If it's not then don't give her half your money. When the relationship goes wrong, so will your finances.... big time. Might seem like a nice earner for now but it won't be when it goes wrong.