Recieving dividend payments from family then sending it to them as gift, is it legal?

**NotAllThere** · 7 March 2016, 14:47

So your dad wants you to be a shareholder in his company, pay dividends and then you gift the income to him?

Probably tax evasion.

**SimonMac** · 7 March 2016, 14:49

Originally posted by mclovin View Post

Hi everybody, i am aware there are different articles and posts around this area but i have found mixed responses and most of it to do with husband/wife relationships.

My father has asked if i would let him make me a shareholder of the company to be able to send me a dividend payment of over 5k but less than 10k. And then for me to send it to his personal bank account as a gift.

This raises some red flags for me, he has assured me it is all legal, and whilst frowned upon by the HMRC they cant do anything against it.

i have read mixed things, some saying that i would have to show my involvedment in the company for that % of the dividends, when obviosuly i have no involvement at all.

Also i can imagine how it would look sending the exact figure out the same day to his personal bank account.

In a nut shell i just want to know if this is legal, and if not what the implications might be, i appreciate anyone who answers, i have tried to do research but cant find a definite answer.

If he only reason he is making you a shareholder is to then give him the money then no it is not legit

**LondonManc** · 7 March 2016, 14:54

Sounds dodgier than a 3 pound note (with or without Mickey Thomas involved).

**WTFH** · 7 March 2016, 15:00

Originally posted by mclovin View Post

In a nut shell i just want to know if this is legal.

Probably not

Originally posted by mclovin View Post

and if not what the implications might be.

A fine, HMRC inspections for the rest of your life and going back historically, jail, dropping soap in the shower, etc.

Some, none or all of the above.

**Alan @ BroomeAffinity** · 7 March 2016, 15:04

Cheers dad.

**VectraMan** · 7 March 2016, 15:05

Of course it's likely no-one will ever find out, especially if you use brown paper envelopes stuffed with cash.

You realise you may end up paying tax on the money he earns?

**nato** · 7 March 2016, 15:06

What kind of parent puts their children in this position!

As said already this sounds as dodgy as it is. I would kindly decline if I was you.

Sorry for you circumstances.

**ChimpMaster** · 7 March 2016, 15:34

[QUOTE=VectraMan;2219738]Of course it's likely no-one will ever find out, especially if you use brown paper envelopes stuffed with cash.

You realise you may end up paying tax on the money he earns?[/QUOTE]

Simple really isn't it.

Son pays the tax, dad gets all the money.

Sins of the father.

**TheCyclingProgrammer** · 7 March 2016, 15:43

Would be caught by the settlements legislation s624 fair and square - there is a settlement (the gift of shares from your Dad to you for nothing) and an arrangement has been made up front for the dividends to be sent to your Dad and presumably for you to give the shares back again too, therefore your Dad will retain an interest in the shares he gives you - so its really just a question of whether you'd get caught...but if you do, there is something they can do about it and your Dad will pay tax on the dividends anyway, plus potentially penalties.

As somebody else pointed out, assuming you DIDN'T get caught, you would be liable to tax on your dividends.

Recieving dividend payments from family then sending it to them as gift, is it legal?