Additional share and the issue of dividends

[radish2008]

Lol. I realise that looks a bit lame. Not had chance to ask my accountant yet so was just trying to get a heads up.

[radish2008]

Two dividend payments from your company into your joint account is no more illegal than if you & your wife both held shares in BT and got the dividends paid into the joint account!

Maybe the accountant is being cautious, but overly so in my view. It's certainly not illegal.

Thank you.

[Clare@InTouch]

Thanks Clare - so 2 different payments into the same joint account is perfectly ok ? My friend's accountant is adamant this is illegal.

Two dividend payments from your company into your joint account is no more illegal than if you & your wife both held shares in BT and got the dividends paid into the joint account!

Maybe the accountant is being cautious, but overly so in my view. It's certainly not illegal.

[kingcook]

Thanks Clare - so 2 different payments into the same joint account is perfectly ok ? My friend's accountant is adamant this is illegal.

[radish2008]

There's no need to make it so complicated, just pay into your joint account - do each dividend separately to be on the safe side and to make things clear.

If your wife gets her salary from Tesco paid into the joint account there's no way HMRC could argue it was yours, and the same is true here. Just make sure you have the dividend paperwork to support the payments.

Thanks Clare - so 2 different payments into the same joint account is perfectly ok ? My friend's accountant is adamant this is illegal.

[Clare@InTouch]

There's no need to make it so complicated, just pay into your joint account - do each dividend separately to be on the safe side and to make things clear.

If your wife gets her salary from Tesco paid into the joint account there's no way HMRC could argue it was yours, and the same is true here. Just make sure you have the dividend paperwork to support the payments.

[radish2008]

I'm in the process of issuing my wife a 49% share of MyCo. As I was doing this I googled some sites to check on the exposure this gives me to HMRS and check on the legislation etc.
Obviously I want to stay off their radar for ever and appreciate there is nothing illegal in doing this - my motivation is to reduce the amount of tax due and I should be able to use about £20k of my wife's allowance.

What I was wondering about was the actual mechanic of paying dividends in this way. I have a friend who operates his Ltd in this way but his wife doesn't work at all. Currently I pay dividends in a joint account we both share but he has usggested that I will need to set up 2 accounts that can only be accessed by myself and my wife and pay dididends in the correct split into these accounts. Obviously we would then move the money back into the joint account.

This sounds to me like I would then be simply routing the money back into the same place to avoid tax. Which of course I am doing; in attempting to reduce the amount of tax I pay I am therefore avoiding paying it.

Does anyone else who pays dividends to their wife have this kind of setup ? Could we do it with 2 savings accounts and bounce the money that way ?

I uinderstand the way the shre issue and split works (gifting of shares etc.) I just didn't realise I needed to do it in any particular way.

Thanks in advance.