Originally posted by garnet
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Reply to: Questions on Class-B shares
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Previously on "Questions on Class-B shares"
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Originally posted by northernladuk View PostGoing forward possibly but that's not what the OP was attempting to do. But guess we are on the same page.
All the above applies for now and also for the new tax year.
I don't see why do you try to create panic here.
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Originally posted by TheFaQQer View PostLast year, after the Autumn Statement, I had a discussion with a well-regarded accountant about alphabet shares in response to the dividend tax. It was his recommendation / thought / opinion that there would be no issue with creating another alphabet share which paid £5k in dividend income (or £5k minus other dividend income) to a spouse, and if they were a higher rate tax payer already then the new tax would be better for them than the old regime.
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Originally posted by northernladuk View PostIndeed but giving them away as brute force attempt to avoid tax isnt very clever executed right or not... But you did say that at the end. I can't remember any of our accountants advocating this is the past.
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Originally posted by TheFaQQer View PostAlphabet shares, if executed properly, are fine. I know of one small business which has four shareholders when they set up, with one class A share each. They then have a class B, class C, class D and class E share for each person so they can pay dividends at a different rate.
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Alphabet shares, if executed properly, are fine. I know of one small business which has four shareholders when they set up, with one class A share each. They then have a class B, class C, class D and class E share for each person so they can pay dividends at a different rate.
With the new dividend tax, there is nothing to prevent you issuing an alphabet share to anyone else and paying them up to the tax free dividend threshold of £5k regardless of their income tax band. This is NOT a preference share, which is where you can hit trouble, nor is it a dividend waiver.
Personally, I wouldn't risk preference shares or a dividend waiver - as a starter, look at the cases involved with dividend waivers to see where people have had issues.
If your intention is to pay equal dividends each year on class A and class B shares, then I would take the hit this year and not bother with the preference shares and / or a dividend waiver.
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Didn't that thread advise that it shouldn't be done? Don't mess with alphabet shares and your wife. Do it properly or not at all.
What you are describing is taking tax avoidance one step too far.
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Questions on Class-B shares
http://forums.contractoruk.com/accou...-b-shares.html
I've read the above thread and am trying to do something similar - like add my wife ( who is unemployed now) to my company as a Class-B share holder and she continues to be ( I have no plans to switch her to Class A next year or ever !). We do not have any more shareholders and i am the director.
And i am doing it this year - cause, I've exhausted my 30k and now am (because I can) adding my wife just so that, I can run it till the end of this year. Is this what is called as Dividend Waiver. But from next year, I wouldn't do this waiver and will declare equally ( even though she'll continue to be a ClassB shareholder)
Whats the experience in general ?Last edited by retyfraser; 14 February 2016, 13:53.Tags: None
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