Reply to: SVP for BTL wife as director

[RetSet]

I do not think this is possible because by doing (a) you are pretty much phoenixing.

I don't believe so. All thats' happening here is a not yet active company has its SIC code changed.

Somebody loses out when phoenixing happens. In this instance nobody would lose anything.

[ChimpMaster]

No need to.

Change the SIC codes of both companies.

Turn OriginalTradingCo into NewSPVCo and the funds are already in place. Appoint MrsMC as a Director and gift her 50% shareholding.

Turn OriginalSPVCo into NewTradingCo and run all future contracts through that.

30 minutes online to Companies House and Robert's your Dad's Brother.

Simples.

You're welcome.

a) Turn OriginalTradingCo into NewSPVCo and the funds are already in place.
This might be possible/legal. Can't see anything wrong with this because funds are still owned by the Co and you will have to still pay tax to extract them.

b) Turn OriginalSPVCo into NewTradingCo and run all future contracts through that.
I do not think this is possible because by doing (a) you are pretty much phoenixing.

[RetSet]

how will you transfer the funds from the trading into the SPV? thats the main question.

No need to.

Change the SIC codes of both companies.

Turn OriginalTradingCo into NewSPVCo and the funds are already in place. Appoint MrsMC as a Director and gift her 50% shareholding.

Turn OriginalSPVCo into NewTradingCo and run all future contracts through that.

30 minutes online to Companies House and Robert's your Dad's Brother.

Simples.

You're welcome.

[Lance]

all sounds very complicated.

In a GAARstly kind of way.


https://www.gov.uk/government/public...ti-abuse-rules

[michaelC]

sorry, I meant my wife being shareholder (50/50).
Accountant says it's fine. Also read up on Arctic systems case - if going by this case, I could make her shareholder of the existing company by gifting her shares, but I am not interested in that, as she might start working soon again, and earn considerably.
The plan of the SPV is longer term investments for the family (even my wife my contribute into the SPV down the line) - the idea is not to channel money through the new SPV, even though if going by the Arctic systems case this could be ok too.

how will you transfer the funds from the trading into the SPV? thats the main question.

[Old Greg]

We need a new sub forum for innovative tax dodging ideas

No need for innovative ideas when there are tried and tested products like the Oude Joris Max 120.

[ChimpMaster]

There have been numerous discussions here on this subject in the past. I have written in some detail about what you can do and how. So I'm not going to write it up again - you can use the Search function in Accounting & Legal.

You will need a good accountant and expect to pay a couple of grand or so for the corporate structure to be set up. It's all above board and legal: you can't get £ out of any of the companies without paying either income tax, div tax or CGT. You can however use your IT Co funds to invest in other ventures/assets this way.

[zafoeta]

Depends, is it tax you're trying to dodge?

sorry, I meant my wife being shareholder (50/50).
Accountant says it's fine. Also read up on Arctic systems case - if going by this case, I could make her shareholder of the existing company by gifting her shares, but I am not interested in that, as she might start working soon again, and earn considerably.
The plan of the SPV is longer term investments for the family (even my wife my contribute into the SPV down the line) - the idea is not to channel money through the new SPV, even though if going by the Arctic systems case this could be ok too.

[northernladuk]

We need a new sub forum for innovative tax dodging ideas

If we had any we could. Instead we've got General for the dumb ones.

[fullyautomatix]

We need a new sub forum for innovative tax dodging ideas

[northernladuk]

Could you also have bi-directional shares between the Ltds? Put them in a different class to your own; dividends are not taxed between UK Ltds afaik.

He can't use his wife to dodge tax in that setup.

[TheGreenBastard]

So the SPV company would become shareholder of the trading company under a different share class so that the trading company can pass the funds as dividends..

I think this could work but im not sure if hmrc sees something wrong with it, as the shares are gifted to the SPV for nothing in return? Especially if the two companies have different shareholders/directors?

I can't see there anything wrong with creating a SPV with this bi-directional dividend setup if the directorship is like-for-like; as you say that's the sticking point if you have two different directors.

Ultimately financial institutes won't lend to you contracting Ltd due to SIC codes and the fact they require the SPV to be wholly for the purpose of real estate investment and renting so it wouldn't be dubious to HMRC.

[michaelC]

Could you also have bi-directional shares between the Ltds? Put them in a different class to your own; dividends are not taxed between UK Ltds afaik.

So the SPV company would become shareholder of the trading company under a different share class so that the trading company can pass the funds as dividends..

I think this could work but im not sure if hmrc sees something wrong with it, as the shares are gifted to the SPV for nothing in return? Especially if the two companies have different shareholders/directors?

[TheGreenBastard]

if you are looking to draw dividends to use your spouse tax allowance then she should be made a shareholder not only director. Because directors are only able to receive salary and thats not tax efficient due to company NI among other things.

Funding would come from trading company? It can't simply be a gift from one company to the other. Theres need to be a valid business reason behind this.

It could be shown as a inter company loan and the SPV company should also charge interest to the trading company as well. And repay the loan in the future back to the trading company

Could you also have bi-directional shares between the Ltds? Put them in a different class to your own; dividends are not taxed between UK Ltds afaik.

[michaelC]

shareholder

if you are looking to draw dividends to use your spouse tax allowance then she should be made a shareholder not only director. Because directors are only able to receive salary and thats not tax efficient due to company NI among other things.

Funding would come from trading company? It can't simply be a gift from one company to the other. Theres need to be a valid business reason behind this.

It could be shown as a inter company loan and the SPV company should also charge interest to the trading company as well. And repay the loan in the future back to the trading company