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Paying Wife Redundancy

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    #41
    Originally posted by anim View Post
    My straight answer is it is allowed.
    If you know otherwise you are welcome to prove me wrong.

    Here is a question for you. If you ask you accountant should you do income splitting with your spouse and he/she say 'no, dont do it' will they be right?

    Now you will say there is a legal precedent that it is allowed.

    Is there a legal precedent that redundancy is not allowed in 2-men LTD?
    Don't be silly. It's all in the relevant taxation laws. And has been tested in court many times.

    At its simplest, just for your sake, you can be made redundant if you have a position in an organisation as a full employee with a contract of employment and a nominated post in that organisation, and if that post is removed from the organisation for any reason, and if you have a given term of engagement in place, and if you have no other connection to the company such as a directorship or other substantive post (look it up).

    Compensation can be at any level from zero upwards at the organisation's discretion, but there are legal minima to cover ex-employees, based on length of service.

    HMRC will have to be involved, as part of the paperwork. If HMRC suspect someone has been made redundant purely to avoid taxation - for example if the role persists afterwards - they will investigate and prosecute.

    Those are the basics. There are, of course, lots of detail exceptions and edge cases which feed into employment law, TUPE and a host of other niggly details, should you want to do your own research..

    End result is if a cowboy one man band tries to use redundancy as an excuse to gift money to a spouse free of tax, HMRC will certainly be taking an interest.

    HTH. BIDI.
    Blog? What blog...?

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      #42
      Originally posted by anim View Post
      What do you mean?

      It is not legal?
      Is is considered fraud?
      It is not recommended by professional accountants and tax advisers?
      There are many case where the simple statement may be true but when the application is taking in to account it ceases to be legal. Probably not because of the original process but applying fall foul of other rules.

      It is legal to carry out redundancy properly and in the right circumstances. To carry it out where that ends up creating aggressive tax avoidance or even evasion isnt...
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #43
        Originally posted by malvolio View Post
        1.
        Don't be silly. It's all in the relevant taxation laws. And has been tested in court many times.

        2. At its simplest, just for your sake, you can be made redundant if you have a position in an organisation as a full employee with a contract of employment and a nominated post in that organisation, and if that post is removed from the organisation for any reason, and if you have a given term of engagement in place, and if you have no other connection to the company such as a directorship or other substantive post (look it up).


        3. End result is if a cowboy one man band tries to use redundancy as an excuse to gift money to a spouse free of tax, HMRC will certainly be taking an interest.

        HTH. BIDI.
        Fully agree. Read my posts.

        Could you provide references for rulings. Where 1 lead to 3 when 2 was true.

        Comment


          #44
          Originally posted by anim View Post
          Fully agree. Read my posts.

          Could you provide references for rulings. Where 1 lead to 3 when 2 was true.
          You don't agree with anything we've said to you. This happens on here from time to time..

          Answer is, we can't give you the answer you want. So off you toddle and go start the process. We can't convince you and you won't convince us so we won't get anywhere.
          'CUK forum personality of 2011 - Winner - Yes really!!!!

          Comment


            #45
            Originally posted by anim View Post
            Fully agree. Read my posts.

            Could you provide references for rulings. Where 1 lead to 3 when 2 was true.
            Happy to do research. My usual retainer and daily fees will apply of course, and I would require a detailed requirement.

            Or, on second thoughts, no. Why waste my time.
            Blog? What blog...?

            Comment


              #46
              Originally posted by anim View Post
              Here is a question for you. If you ask you accountant should you do income splitting with your spouse and he/she say 'no, dont do it' will they be right?

              Now you will say there is a legal precedent that it is allowed.
              If I ask my accountant should I income split with my wife, they WILL say "no, don't do it", and they would be 100% right.

              My accountant is not writing laws. My accountant does not set legal precedents. My accountant isn't saying whether it's "allowed" or not.

              My accountant looks at my financial circumstances and those of my wife. Then they advise me on what they consider the most sensible options are for us.


              ...but then again, my accountant and I are not using the word "allowed" with zero evidence to explain.
              …Maybe we ain’t that young anymore

              Comment


                #47
                Originally posted by anim View Post
                My straight answer is it is allowed.
                If you know otherwise you are welcome to prove me wrong.
                Nope. You do it, and let us know how it went.
                Down with racism. Long live miscegenation!

                Comment


                  #48
                  at risk of confusing the thread....

                  a pal of mine retired 3 years ago.
                  He took all the money out his company, made himself redundant after there was no money left, and got the government to pay statutory redundancy to him personally as the company couldn't afford to.
                  Legal. yes.
                  He got a lawyer to sort it.

                  Risks... unknown as he's the only case I've heard of.
                  See You Next Tuesday

                  Comment


                    #49
                    Originally posted by Lance View Post
                    at risk of confusing the thread....

                    a pal of mine retired 3 years ago.
                    He took all the money out his company, made himself redundant after there was no money left, and got the government to pay statutory redundancy to him personally as the company couldn't afford to.
                    Legal. yes.
                    He got a lawyer to sort it.

                    Risks... unknown as he's the only case I've heard of.
                    Indeed I laugh at people who play a straight bat against The corruption and bully boys if HMRC

                    Pay her £30K

                    Make yourself redundant, anther 30K

                    Get a BBL - fill your boots




                    Sent from my iPhone using Contractor UK Forum

                    Comment


                      #50
                      Anything is "possible"...

                      It's your money, and it's your risk.

                      IANYA.
                      I was an IPSE Consultative Council Member, until the BoD abolished it. I am not an IPSE Member, since they have no longer have any relevance to me, as an IT Contractor. Read my lips...I recommend QDOS for ALL your Insurance requirements (Contact me for a referral code).

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