• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

Dividend Splitting - And subsequent benefit to me. Legal?

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    #11
    If you give anything to anyone, then inheritance tax becomes due, if the gift is outside various thresholds, and you snuff it within 7 years.

    A gift has to be with no strings attached, and not in return for any services or service.

    Since the rent is in your name, she is giving you a gift from the income from shares that you gave her. It looks artificial, but whether there are grounds for HMRC to take action, I do not know. If she dies within seven years of paying your rent, then there will be inheritance tax on that.
    Down with racism. Long live miscegenation!

    Comment


      #12
      Why dont you just sublet the flat to her, and charge the about 80% of the rent? I am not sure about the tax implications on the earnings as rent, but then everything is legal.

      Comment


        #13
        I'm 28, have been with my partner 4 years.... on and off... regardless, if we did split, she would not try to destroy me and my business. I may loose the divs remaining under her name, but in all likelihood she wouldn't take them. She just isn't like that.
        They are never like that until you piss them off. A woman scorned etc. In my experience you cannot tell what people are like once you emotions get involved. I am sure John Wayne Bobbit thought his wife just wasn't like that.

        On and off???? Thats not a risk?

        The final question is, in the future, can she gift the shares back to me? If we decided our relationship wasn't going as we wished, are there any legal implications to her doing this?
        You can but she won't. Check out American Chopper. The son wouldn't gift his shares back to his fathers business and he is having to sue him to buy them off him.

        I seriously think you are underestimiating the fall out from this if it goes wrong whatever the legal implications are.
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #14
          Duly noted, but I'm just looking for answers to the legal side of things.
          There is no point even worrying about the personal, if the whole idea is illegal.

          Comment


            #15
            Originally posted by heff View Post
            Duly noted, but I'm just looking for answers to the legal side of things.
            There is no point even worrying about the personal, if the whole idea is illegal.
            That is very true indeed! I shall bow out and let my more knowledgeable and esteemed colleagues advise on that side of it. Either that or a set of numpties who regularly post on here will come along and completely bamboozle you
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #16
              I am new to the contracting game and looking for clarity on this issue. The mrs and I own a house, live together but are not married. Is it legit to have her as a shareholder taking a dividend that keeps her below the higher rate tax with the dividend payments going into a joint bank account? Previously we split the mortgage. Can she now pay the full mortgage without raising eyebrows at HMRC? What about buying a car but having it registered under my name? Apologies if this has been covered before, I did have a good trawl through the forum. Just a bit unsure of the amount of detail HMRC would go into given any investigation etc.

              Comment


                #17
                No, you have to be married, I spent a lot of time recently looking at this. What you do afterwards with the money isn't relevant

                Comment


                  #18
                  Thanks for the response JoJo. Perhaps I should just forget it then and be 100% shareholder. Interesting though as my accountant doesn't have a problem with it and I do know of other contractors who are doing this.

                  Comment


                    #19
                    As JoJo says above, there's an exemption if you're married but that doesn't extend to people who are merely living together. The income "shifted" to her would be seen as yours and taxed as if it had been yours.

                    The actual legislation is here if you're bored enough to read through it all: TSEM4000 - Settlements legislation: contents
                    ContractorUK Best Forum Adviser 2013

                    Comment


                      #20
                      What about making one of the children a shareholder (who is above legal age)?

                      Comment

                      Working...
                      X