Reply to: At which point is it worth having the wife as a Director?

[blacjac]

I take it you mean this rule (lifted from your link):



That's in interesting one, I suppose it all depends on if the HMRC regard owning shares in a private Ltd as an investment or not...
Anyone know the answer to this? Especially if the shares were gifted and not paid for?

Dividend income, whether from a private or a public company will be treated on the tax return as investment income.

Alan

Well that clears that one up then!

Thanks Alan

[thunderlizard]

So she can be a sharedholder without being a director!

Thank goodness for that. That means I can keep my FTSE 100 tracker pension, without having to go to all those FTSE 100 company board meetings.

[Nixon Williams]

That's in interesting one, I suppose it all depends on if the HMRC regard owning shares in a private Ltd as an investment or not...
Anyone know the answer to this? Especially if the shares were gifted and not paid for?

Dividend income, whether from a private or a public company will be treated on the tax return as investment income.

Alan

[blacjac]

I think if you receive more tha £10K in dividends (gross) you must complete a form. See here http://www.hmrc.gov.uk/sa/need-tax-return.htm. You are classified as having "complex tax affairs".

I take it you mean this rule (lifted from your link):

have annual income from savings or investments of £10,000 or more (before tax)

That's in interesting one, I suppose it all depends on if the HMRC regard owning shares in a private Ltd as an investment or not...
Anyone know the answer to this? Especially if the shares were gifted and not paid for?

[Archangel]

If her total income does not exceed the higher rate threshold and she isn't a director then there is no SA requirement.

Care to correct this in the light of Lewis's answer above?

[Lewis]

If her total income does not exceed the higher rate threshold and she isn't a director then there is no SA requirement.

I think if you receive more tha £10K in dividends (gross) you must complete a form. See here http://www.hmrc.gov.uk/sa/need-tax-return.htm. You are classified as having "complex tax affairs".

[slackbloke]

You referring to self assessment? If she is not a director, just a shareholder, are you saying she doesn't need to fill in a SA?

Where did you get that from?

It is as Just1morethen stated. The implication from the OP is that they will try and remain below the threshold, so unless the wife has other complicated tax matters, she would not need to complete SA. It is the HMRC regs for SA.

[Alan @ BroomeAffinity]

You referring to self assessment? If she is not a director, just a shareholder, are you saying she doesn't need to fill in a SA?

Where did you get that from?

If her total income does not exceed the higher rate threshold and she isn't a director then there is no SA requirement.

[ratewhore]

If you make your wife a director then she will have to complete SA.

You referring to self assessment? If she is not a director, just a shareholder, are you saying she doesn't need to fill in a SA?

Where did you get that from?

[Fred Bloggs]

What advantage is there is having her as a director? I would have thought that it's just more hassle?

Limited really, but she signs contracts and other stuff that needs a directors signature. She is proactive in running the buisiness side of things and all decisions made are joint director decisions. In other words, a "proper" family business.

[Archangel]

What advantage is there is having her as a director? I would have thought that it's just more hassle?

No advantage whatsoever, nada zilch, don't do it.

[sage@reillymcmordie]

wife as director

slackbloke's original response is correct. i would add that HMRC has yet to decide whether to challenge these arrangements as tax evasion. if they do - it might be retrospective. best advice is probably to give yourself a realistic salary (market value) and distribute any reserves in accordance with the dividend structure.

[ChimpMaster]

For our Ltd Co we have a 60/40% share holding with wifey as Co Sec and also a Director. It works for us and keeps us both under the 40% income tax threshold. I also use a hefty monthly company contribution into my SIPP to reduce tax burden.

What advantage is there is having her as a director? I would have thought that it's just more hassle?

[dave20]

you should make her a shareholder only. Then before her earnings hit the high rate tax bracket (40,835 including tax free allowance) give the share back to the company. or transfer it to your pet goldfish.

[Fred Bloggs]

For our Ltd Co we have a 60/40% share holding with wifey as Co Sec and also a Director. It works for us and keeps us both under the 40% income tax threshold. I also use a hefty monthly company contribution into my SIPP to reduce tax burden.