Paying spouses dividends...?

[LouC]

Hi everyone - i'm not as up to date on this as I should be.

Have they stopped people taking on their spouses as partners in a ltd company and paying them dividends.

I know about Arctic and S660, but last i'd heard the government had shelved plans to come down hard on this

Anyone got up to date info?

Thanks
Lou

[malvolio]

Hi everyone - i'm not as up to date on this as I should be.

Have they stopped people taking on their spouses as partners in a ltd company and paying them dividends.

I know about Arctic and S660, but last i'd heard the government had shelved plans to come down hard on this

Anyone got up to date info?

Thanks
Lou

Yes. It won't happen.

HTH

[scooterscot]

Here's another question, does the split matter?

Can I, for insistence, go 49/51 with the shares between my wife and I?

I believe my accountant advised against it, but why should it matter? If it's legal then why is the phobia still there? Ah because HMRC can move the goal-posts at it's discretion...

[Platypus]

Here's another question, does the split matter?

Can I, for insistence, go 49/51 with the shares between my wife and I?

I believe my accountant advised against it, but why should it matter? If it's legal then why is the phobia still there? Ah because HMRC can move the goal-posts at it's discretion...

Back in the days when I had a spouse, we had a 51:49 share split. On the advice of my accountant.

[BrilloPad]

Yes. It won't happen.

HTH

Was that because of the PCG perchance?

[ASB]

Here's another question, does the split matter?

Can I, for insistence, go 49/51 with the shares between my wife and I?

I believe my accountant advised against it, but why should it matter? If it's legal then why is the phobia still there? Ah because HMRC can move the goal-posts at it's discretion...

The fact that she could vote you off the board might be a possible drawback.

[Fred Bloggs]

Fill yer boots.

[LouC]

Cheers all

Thanks for that.

On a related question. Say we 'decide' on a 70/30 split, how does this work re dividend payments. Can she only be paid 30% of the total dividends paid from the company.

eg the company pays out 35000 dividends total.
70% = 24.5 (to me)
30% = 10.5 (to her)

Cheers
Lou

[Gonzo]

Thanks for that.

On a related question. Say we 'decide' on a 70/30 split, how does this work re dividend payments. Can she only be paid 30% of the total dividends paid from the company.

eg the company pays out 35000 dividends total.
70% = 24.5 (to me)
30% = 10.5 (to her)

Cheers
Lou

Assuming that you have a simple share structure with a single class of share issued, then each share receives an equal proportion of the total declared dividend.

In that case the figures in your example would be correct.

Of course, if you have an existing company then there is more than meets the eye to rearranging the share capital which would probably need input from an accountant.

EDIT: I refer you to ASB's more comprehensive answer on the topic provided when you asked it back in November.

http://forums.contractoruk.com/688112-post4.html

[LouC]

Thanks Gonzo!

Like all good contractors i need to be told the same thing at least 3 or 4 times before it sinks in