Paperwork required to split dividends with wife

[mickael28]

Hello guys,

I recently gifted 50% of the shares in my Ltd company to my wife but I just filled a form to transfer the stock.

I've read posts here now that say that she should pay for those shares and I should have a board meeting minutes to record this transfer.

I've asked my accountancy firm about it and they've told me that that's the process expected for a large company with multiple shareholders but as it is just me and my wife I do not need to worry.

Just wondering what your view is guys, as there are contradicting opinions...

Cheers!

[Nixon Williams]

Just because your company is not an international PLC, you will still need to ensure that you complete the paperwork to ensure that our friends at HMRC do not have any reason to have a look at what you have done.

With some new clients we often see dividends declared with no paperwork etc, this can also be very dangerous.

Speak to your accountant and get them to sort this out asap.

Alan

[mickael28]

That's what I thought, many thanks Alan! I'll go back to them...

[northernladuk]

The idea of splitting shares with wife is a contentious one with accountants advising everything from don't do it to fill yer boots 50/50. Doing it 50/50 is the riskiest end of this option. The fact your accountant has advocated this option and is now being totally slap dash about the approach to it would set my alarm bells ringing very loudly.

If my accountant was going to suggest a solution with any amount of risk I would expect him to back this up by dotting every i and crossing every t to reduce this risk. The fact your guy doesn't seem to give a damn worries me greatly and I would even go as far to question his initial suggesting of 50/50 split.

The choice is yours but your situation does not make me feel comfortable at all. I think you are getting a bum deal here.

[d000hg]

Just because your company is not an international PLC, you will still need to ensure that you complete the paperwork to ensure that our friends at HMRC do not have any reason to have a look at what you have done.

With some new clients we often see dividends declared with no paperwork etc, this can also be very dangerous.

Speak to your accountant and get them to sort this out asap.

Alan

He said he had filled out a form so it's not clear if he has or hasn't done required paperwork...

[mickael28]

Yes, I filled out a form to transfer the shares but they didn't ask her to pay from her personal bank account for them and we didn't record this transfer in a board meeting minutes (as recommended in other posts on the site).

I just went back to them now and they said that she "can" pay for 50% of the shares and I can write what I decided in a document (although they don't have templates for this).

I was doubtful about the 50/50 split at the beginning as well but after reading about different views and asking them, they confirmed that in my situation was the best thing to do so it was that or going against my accountant suggestions. There's so much one can know/learn without being a full time professional so at the end, I trusted her view about the subject...

I've noticed though, that even professionals within the same sector (whatever that is) usually have opposite opinions regarding a lot of subjects, which makes you wonder how's that things work if people do totally different things under the same circumstances depending on how they're receiving help/advice, or from whom :S

[Clare@InTouch]

Yes, I filled out a form to transfer the shares but they didn't ask her to pay from her personal bank account for them and we didn't record this transfer in a board meeting minutes (as recommended in other posts on the site).

I just went back to them now and they said that she "can" pay for 50% of the shares and I can write what I decided in a document (although they don't have templates for this).

I was doubtful about the 50/50 split at the beginning as well but after reading about different views and asking them, they confirmed that in my situation was the best thing to do so it was that or going against my accountant suggestions. There's so much one can know/learn without being a full time professional so at the end, I trusted her view about the subject...

I've noticed though, that even professionals within the same sector (whatever that is) usually have opposite opinions regarding a lot of subjects, which makes you wonder how's that things work if people do totally different things under the same circumstances depending on how they're receiving help/advice, or from whom :S

That's because tax law is open to interpretation in many cases, and different accountants will have different attitudes to risk. Some are bullish and say claim for everything and hope HMRC don't look, some are the exact opposite and won't suggest you claim for anything at all lest HMRC look, but most of us are in the middle. Claim what you can but err on the side of caution if something is contentious.

Most of the time it's your decision as you're the one that's legally responsible, a good accountant should advise on the risks, give their opinion, and then ask how you wish to proceed (unless it's downright daft, in which case they'll refuse to prepare the accounts/return on that basis).

Re the shares - often they are gifted, but if you do charge her for them then you need to go careful about stamp duty.

[mickael28]

Re the shares - often they are gifted, but if you do charge her for them then you need to go careful about stamp duty.

I didn't know anything about the stamp duty although I suppose the accountant will handle that, but is there any pros/cons between gifting or charging for them? She's not paid anything yet but I was thinking about doing it as I didn't know you can just gift them without her paying for them...

[psychocandy]

The idea of splitting shares with wife is a contentious one with accountants advising everything from don't do it to fill yer boots 50/50. Doing it 50/50 is the riskiest end of this option. The fact your accountant has advocated this option and is now being totally slap dash about the approach to it would set my alarm bells ringing very loudly.

If my accountant was going to suggest a solution with any amount of risk I would expect him to back this up by dotting every i and crossing every t to reduce this risk. The fact your guy doesn't seem to give a damn worries me greatly and I would even go as far to question his initial suggesting of 50/50 split.

The choice is yours but your situation does not make me feel comfortable at all. I think you are getting a bum deal here.

Nothing wrong with 50/50 with your spouse.

BUT, making sure the paperwork is done properly is very important.

[northernladuk]

I didn't know anything about the stamp duty although I suppose the accountant will handle that, but is there any pros/cons between gifting or charging for them? She's not paid anything yet but I was thinking about doing it as I didn't know you can just gift them without her paying for them...

Bearing in mind what we have heard about your accountant so far I don't think you are handling this properly. Remember at the end of the day YOU are legally resonsible for your companies accounts, not your accountant. Claiming ignorance or trying to blame your accountant when you get investigated will not stand up. You either understand every detail of everything your accountant is doing including the risk or don't do it IMO. You have already questioned your accountant in this thread so 'supposing' he might do something isn't clever.