Reply to: Shall I make my wife a director - "post artic"

[drac]

I needed the gentle caring support of the CUK board to nudge me a little further into the right direction I think

[Robot]

Congrats!

Drac – Went from

“We have a similar set-up. I was contemplating issuing a share to her and making her a director to split some of the dividends. I know it is a tricky one but I am seriously contemplating it. What do people think”?

To

“I don't want an accountant thanks! Had one of those and they made more mistakes than I did... at least doing it yourself you learn and understand the mechanics.
Cheers for the help”

To

“as i understand the issue i thought that the gift of the share was NOT wholly or substantially a right to income. therefore whether it was gifted or the fact that there was little capital in the business the case did not fall within S660A ...

if that makes sense?
isn't that how we all we interpreting it ?”

You obviously learn quickly Drac and without the aid of accountant. Well done

[Spartacus]

That was my understanding of what the judges said. If the share was gifted there would be no case to answer and, even if it wasn't, there is no case to answer anyway as an ordinary share is not wholly or substantially a right to income.

[drac]

as i understand the issue i thought that the gift of the share was NOT wholly or substantially a right to income. therefore whether it was gifted or the fact that there was little capital in the business the case did not fall within S660A ...

if that makes sense?
isn't that how we all we interpreting it ?

[Bradley]

I don't want an accountant thanks! Had one of those and they made more mistakes than I did... at least doing it yourself you learn and understand the mechanics.
Cheers for the help

Read Tax Bulletin 64. Example 4 - Subscribed shares with little capital value then gifted!

Didn't the Court of Appeal say that the gifting thing would work even if there was little capital?

[Robot]

I don't want an accountant thanks! Had one of those and they made more mistakes than I did... at least doing it yourself you learn and understand the mechanics.
Cheers for the help

Read Tax Bulletin 64. Example 4 - Subscribed shares with little capital value then gifted!

[freshblue]

Yup but could be VERY expensive if you get it wrong. Darren and SJD are recommended by most on here.

[drac]

I don't want an accountant thanks! Had one of those and they made more mistakes than I did... at least doing it yourself you learn and understand the mechanics.
Cheers for the help

[planetit]

So if you have 1000 shares and only 1 is paid up has the company been retaining the 999 equal shares of the declared dividend?

It doesn't have to. Dividend is paid only to the issued shares.

Drac, you need to issue another 59 shares to yourself (making 60) and 40 to your wife. Whether you should each pay for them or not I don't know. Get an accountant.

[drac]

as I understood it , shares are either issued or authorised. issued means sold to share holders, voting power, dividends etc
authorised means potential shares available based on articles when the company was formed. unless a share is issued no dividend is paid ...

I hope!

still stuck over what to do with the logistics of my situation

tempted to throw £999 into the business, call up the share capital and allocate it 60/40 and show the £1000 on the balance sheet as invested share holder assets

[boredsenseless]

ok, still confused how to do this and would appreciate some help
1000 shares , 1 share alloted at the moment (mine) have been paying myself a dividend and both my wife and i salary
i want to split the dividends in future , say 40% her 60% me

how do i do this ?

1) do i issue the remaining 999 shares on a 60/40 split basis ?
2) issue say 9 shares , allot 5 more to me and 4 to her?
3) issue seperate class of share?

if i issue the shares am i best actually paying for them and investing some money into the business rather than gifting them and putting the payments thru the books and showing the funds on the balance sheet ?

help!

So if you have 1000 shares and only 1 is paid up has the company been retaining the 999 equal shares of the declared dividend?

A dividend payment to my mind is paid equally based on the amount available.

I created a company with just 2 shares, split equally, both paid for, you can always split them later if needs be

[drac]

ok, still confused how to do this and would appreciate some help
1000 shares , 1 share alloted at the moment (mine) have been paying myself a dividend and both my wife and i salary
i want to split the dividends in future , say 40% her 60% me

how do i do this ?

1) do i issue the remaining 999 shares on a 60/40 split basis ?
2) issue say 9 shares , allot 5 more to me and 4 to her?
3) issue seperate class of share?

if i issue the shares am i best actually paying for them and investing some money into the business rather than gifting them and putting the payments thru the books and showing the funds on the balance sheet ?

help!

[Lucifer Box]

Just give her 30-40% of the ordinary shares. If you give her anything other than ordinary shares (preference shares, or shares with no voting rights, say) it is arguable that they are "wholly or substantially a right to income" and you could then be a potentially legitimate target of a 660 attack.

As always, this expert legal opinion is worth exactly what you paid for it and you should seek professional advice from the likes of Accountax or Qdos.

[drac]

i don't follow you , i was going to allocate say 30-40% of the dividends to her and in order to do that I thought a different class of share would be the way to go.. is there another way?

clearly I have a bit of reading to do in this logistics of this with companies house etc as it all looks a little bit confusing after a 13hr day at work

[Lucifer Box]

Do not give your wife a different class of shares to those you hold yourself. All 660 bets are off if you do.