Hi - After setting up a new Ltd for purposes of a contract which will last from October 2020 to April 2021 (6 Months), I made my wife a 50% shareholder and director. The usual thing - she has an unused tax allowance, I have already earned enough in 6 months to be in 40% tax. Therefore I would ideally like to pay as much as possible to wife over the last 6 months, and take zero myself. She does any bookkeeping or admin. Seems effective for me to pay her a dividend and do a waiver for myself - but reading through the legaleeze it seems that I have to have a 'valid commercial reason' to waive my (ordinary share, pro-rata) dividend. What classifies as a 'valid commercial reason' ? - I can't seem to find anything on this. How about ' I need to buy furniture, computers, car, etc. blah blah' - will that cut it with HMRC ?? - or will I have to issue the same pro-rata dividend to both of us ?? - same for the salary - can I pay wife, say, 50k in next 6 months to keep below 20%, and taking sweet nothing personally ?? - seems that the well-known Arctic Systems case set a president, but not for dividend waivers....
Cheers!!!!
Cheers!!!!
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