Reply to: Withdrawing more money without unacceptable tax bill - Imaginative advice needed

[ASB]

What if you are married to a dog?


Anyway getting back on track. If you pay divi's to yourself and your wife (equally) and you both have your own bank account. Then your wife puts some of her divi's in the joint account. The hubby then takes it out of the joint account to help pay the mortgage as his account is the account all the big bills come out of. Is that acceptable? (ignoring the Artic case). Or would the mortage be better coming out of the joint account?

Read the rule and make your own decision. Our tax system is so transparent that whilst self asessment is mandatory it takes 3 senior appeal court judges and then an appeal to the HOL to decide a simple question.

[jason986]

hmmm

What if you are married to a dog?


Anyway getting back on track. If you pay divi's to yourself and your wife (equally) and you both have your own bank account. Then your wife puts some of her divi's in the joint account. The hubby then takes it out of the joint account to help pay the mortgage as his account is the account all the big bills come out of. Is that acceptable? (ignoring the Artic case). Or would the mortage be better coming out of the joint account?

[ASB]

Thats generally because married couples have joint accounts and the IR can argue that the money is coming back to the majority share holder who should then be paying tax on it at the higher rate.

Marriage is specific in the legislation. It causes different treatment. But, yes, if there is flowback from a person to which you are not married then hector can easily come a calling. Can't be bothered to go read it again to ascertain the different treatment for married couples.

I had assumed the dog was going to spend the dosh to it's own benefit on Bonios and French Poodles though.

Anyway, it's a bit academic since the dog cannot itself own the shares. They would have to be in a blind trust for it, only <i>people</i> over 18 can directly hold shares.

[DaveB]

If you don't marry the dog you should be OK. The usual bit to attack with S660 only applies to when married.

Could be a few other flaws with the dog owning half the company though.

Thats generally because married couples have joint accounts and the IR can argue that the money is coming back to the majority share holder who should then be paying tax on it at the higher rate. The key is maintaining seperation.

Yes, in theory the dog with his own account might work, providing you have power of attorney for the dog to manage its financial affairs. However, the minute any of that money ends up in your personal possession you're buggered.

[ASB]

The catch with that is the joint account bit and that gets you nailed by S600, if I understand it right anyway. Don't pay divi's in such a way that the money can be construed as coming back to you in anyway and you *should* be ok.

If you don't marry the dog you should be OK. The usual bit to attack with S660 only applies to when married.

Could be a few other flaws with the dog owning half the company though.

[ladymuck]

The catch with that is the joint account bit and that gets you nailed by S600, if I understand it right anyway. Don't pay divi's in such a way that the money can be construed as coming back to you in anyway and you *should* be ok.

True. How about setting up a new bank account just for the dog and, because he's not got opposable thumbs to hold the cash, you go to the ATM to draw the money out for him?

[ASB]

"I pay myself a minimum wage as required by law,....."

Minor point. Minimum wage is not generally required for a director unless they have a contract of employment.

[DaveB]

You could make your dog (or other pet) an equal partner in the business, and pay them dividends, which would go into the joint account you have with them? Probably get caught under S660 or whatever it is!!

The catch with that is the joint account bit and that gets you nailed by S600, if I understand it right anyway. Don't pay divi's in such a way that the money can be construed as coming back to you in anyway and you *should* be ok.

[boredsenseless]

A colleague told me this:

He leant the company money to purchase a company car. Then the company repays him plus interest (say 12-15%).

Whether it's true or legal is, however, an entirely different argument...

Does this guy work for you or you for him, or are you both employed by another company directly as permies?

If not then he's an associate or acquaintance not a colleague

[ladymuck]

You could make your dog (or other pet) an equal partner in the business, and pay them dividends, which would go into the joint account you have with them? Probably get caught under S660 or whatever it is!!

I think you can loan yourself a sum of money (not overly sure about how much, or for how long) but at some point you'll have to repay it and deal with the consequences!

[css_jay99]

ratewhore,

there is always a paper trail when IR comes calling !. I am sure Your friend will still have to declare the interest as income in his Self Assessment

If he is not declaring it, you better tell him to do so! .

[ratewhore]

A colleague told me this:

He leant the company money to purchase a company car. Then the company repays him plus interest (say 12-15%).

Whether it's true or legal is, however, an entirely different argument...

[Gold Dalek]

This is so 1990s!!!

In the old days you could argue about fairness... these days we are being actively targeted - Artic case, IR35, 660 etc.. I don't know if you have had an inspection recently? but the Govt seems to have adopted a "robber Baron" approach to collecting taxation...
Also:
Can a Government that cannot control its borders expect to be able to collect taxes?

If you think it's fair that those taxes are now pledged to help Africa, fight dubious wars, reward corporate Labour sponsors etc... do you think that's fair?

Ethics ... out of the window

[mobwell]

Could my company buy/pay the mortgage on property, and if so as I own the company would I therefore own the property?

[mobwell]

boredsenseless: Very good point. You are quite right. My wording was off. I'll be more precise in the future.