Reply to: Splitting divs between husband and wife

[ASB]

Nope.

People I know have one or both their parents as directors and shareholders.


Not at the moment. The person involved should be an adult as it gets messy.

The income shifting consultation document included anyone having shares in a company whether they were related to you or not, lived in your household or not.

If the beneficial owner is under 18 then the asset needs to be held in a bare trust. In any event there are specific provisions in S660 which would make it pointless from a tax point of view (in fact it doesn't matter what the assets are, if they generate more than 100 quid in income the parent gets taxed).

[SueEllen]

Can you only income shift in this way to your wife? I'm not married but am considering doing this with my long term girlfriend who I live with, as long as it wouldn't cause problems with the taxman

Nope.

People I know have one or both their parents as directors and shareholders.

I was thinking you could issue shares to anyone, but surely there must be some rules on this to stop people making each of thier kids equal shareholders, or elderly relatives.

Not at the moment. The person involved should be an adult as it gets messy.

The income shifting consultation document included anyone having shares in a company whether they were related to you or not, lived in your household or not.

[ASB]

I've always understood divi waivers to be a big no no no?

50/50 split with the missus, I'm taking the money and running while I can.

It is one of thing HMRC look at in terms of potential S660 claims. However it depends to a certain extent how it's done. Essentially if the waived amount is retained by the company rather than being distributed to other shareholders then it is much less of a risk.

By example, company has 100k of reserves and devided to pay a dividend of 1k pershare. Shareholder 1 gets 50k and shgareholder 2 waits, so the 50k is inb the company - safer.

If the company paid a dividend of 2k per share because shareholder waived then this would be much less safe because the company could only pay that dividend because of the waiver from shareholder 2.

[Fred Bloggs]

I've always understood divi waivers to be a big no no no?

50/50 split with the missus, I'm taking the money and running while I can.

I heard that too. My accountant saw no problem in doing it while we waited for Arctic Systems to be sorted out. Our share split is 2/3 : 1/3.

[moorfield]

While Arctic Systems was bubbling away, I kept my pay/divi below the 40% threshold and the missus took a dividend waver.

I've always understood divi waivers to be a big no no no?

50/50 split with the missus, I'm taking the money and running while I can.

[FarmerPalmer]

any idea what the form number is?
i looked on companies house site but no idea where or what form to look for..
thanks.

http://www.companieshouse.gov.uk/about/pdf/gba6.pdf

says:

10. Must a company notify Companies House when it has made an allotment of shares?
Within one month of the allotment of shares, a company must deliver a return of allotment, on Form 88(2), to Companies House. No fee is payable to Companies House.

Which Links to:

http://www.companieshouse.gov.uk/for...Info.shtml#882

[jss1961]

You fill in a form from the Companies House website. Easy peasy.

any idea what the form number is?
i looked on companies house site but no idea where or what form to look for..
thanks.

[Fred Bloggs]

Fill your (her) boots while you can is my advice.

[spig]

Can you only income shift in this way to your wife? I'm not married but am considering doing this with my long term girlfriend who I live with, as long as it wouldn't cause problems with the taxman. I was thinking you could issue shares to anyone, but surely there must be some rules on this to stop people making each of thier kids equal shareholders, or elderly relatives.

If I was able to do this and keep her earnings overall below £40k, does this mean she would have to fill in a self assessment tax return?

[Fred Bloggs]

You fill in a form from the Companies House website. Easy peasy.

[jss1961]

While Arctic Systems was bubbling away, I kept my pay/divi below the 40% threshold and the missus took a dividend waver. That led to there being a fair bit of cash in the business account. Post Arctic, the missus is now taking divis again and we've drawn out all the surplus cash that was in there. I operate the bank account with as little cash in it as possible, that way there's less cash available in the business to attract the attention of Hector.

at the moment i'm the only shareholder in my company, i'm thinking of adding my wife as a shareholder as well so she can take some dividends (she actually does some work for the company).
what do i have to do to add her as a shareholder?
can someone point me to the relevant forms?
thanks.

[Little'Old Me]

It's the most bizarre wording. I work for a multi billion international service provider. I like most of the other few thousand employees have a few shares.

We all have to ticke the box under that wording.

Would you really qualify under all three? As long as you don't qualify under one, you don't have to "tick" the box.

[Fred Bloggs]

I didn't think that cash in the business account would attract HMRC's attention. If anything, taking large dividends would probably get more attention seeing as it's highlighted on the tax return.

I think it's debatable. But the way I see it is that when HMRC are doing their risk/reward assessment on businesses to attack, the business with almost no cash is far less attractive of a target than a business flush with cash. We have not pulled the extra cash out in just one year, to do so would be waving a flag, I agree. However, IMO, there will be tens of thousands of Ltd Co's who have distributed extra cash as a result of the Arctic decision. We are not unusual in that respect.

[ChimpMaster]

While Arctic Systems was bubbling away, I kept my pay/divi below the 40% threshold and the missus took a dividend waver. That led to there being a fair bit of cash in the business account. Post Arctic, the missus is now taking divis again and we've drawn out all the surplus cash that was in there. I operate the bank account with as little cash in it as possible, that way there's less cash available in the business to attract the attention of Hector.

I didn't think that cash in the business account would attract HMRC's attention. If anything, taking large dividends would probably get more attention seeing as it's highlighted on the tax return.

[Fred Bloggs]

I've been off the radar on this one Fred so would appreciate an explanation on why you do this?

While Arctic Systems was bubbling away, I kept my pay/divi below the 40% threshold and the missus took a dividend waver. That led to there being a fair bit of cash in the business account. Post Arctic, the missus is now taking divis again and we've drawn out all the surplus cash that was in there. I operate the bank account with as little cash in it as possible, that way there's less cash available in the business to attract the attention of Hector.