Share restructure. Alphabet shares for better divi distribution.

[northernladuk]

It’s cause we NAT loves you.

As for there not being a mod in sight? Stop picking your nose, and you should have washed your hand earlier, that’s disgusting.

I pulled out this massive booger and imagine my surprise when I noticed it looked just like you!

The really weird thing about it all is I don't know what you look like.. but I am sure my booger looks like you.

[WordIsBond]

It's cool how the mods here really set the tone for decorum in the professional forums.

If you're knee deep in the boogers, you really need to see a doctor.

[pscont]

Could mods clean the off topic in here?
Just asking like....

By the way, thanks for the one or two sensible inputs. And yes, I have a 100% valid business reason to issue A/B shares, as valid as everyone else's.

[pscont]

MyCo has three classes of shares. All shares have equal rights. whether you are using them as income settlement or something else inappropriate.

In short, it is possible, and might make sense in some cases, but it might be a really bad idea, and many people who get brilliant and exciting ideas about using alphabet shares are probably setting themselves up for trouble.

I thought if the shares are with equal rights and are sold to a buyer at real value i.e. 1/103rd of the profit of the LTD at this moment (which is a price too high considering a contract will end soon) then settlement rules are not broken.
At least this is the guidance in the HMRC's documents.

[WordIsBond]

LOL, we got moved to General. That's probably my fault for taking shots at the mods. Rather than clean up their horrible behaviour(!!!!) they moved it to General! Shocking, that!

Ok, one more serious comment here:

I thought if the shares are with equal rights and are sold to a buyer at real value i.e. 1/103rd of the profit of the LTD at this moment (which is a price too high considering a contract will end soon) then settlement rules are not broken.
At least this is the guidance in the HMRC's documents.

You could certainly sell shares with equal rights for an equal share of the company's value. And if you used the same class of shares then as long as you don't have a wildly inappropriate valuation, you should be fine.

But if you have alphabet shares, then presumably the purpose is to pay different dividends to the different classes. If dividends are disparate then that should have been reflected in the sale price. If you sold the shares at 1/103 of the value of the company but pay dividends of, say 1/3 of the disbursed dividends to these shareholders, HMRC is likely to look askance at that and say this is a settlement.

I'll give you an example of a business reason. I have an employee who is working on a long-term R&D project. He's no longer contributing to the general revenue of the company. So we converted his shares to another class of shares. If this project pays off like we think it will, he's going to make a killing on it, because his shares are going to get a really nice dividend that nobody else gets. But his shares aren't getting any dividends now, because we don't know if this is going to be a profitable project or not, and because he's not contributing to the profit of the company right now.

The project might fail. It might not sell. There's risk but also a huge upside for him and a big part of that will be dividends. That's why we changed his class of shares.

That's a business reason. We use employee ownership as a means of profit-sharing and we have two distinct revenue streams, one actual and the other potential. This divide is reflected in the class of shares owned by the employees who produce the different streams.

What is your business reason for selling alphabet shares (instead of just more shares of the same class as yours)? What in your business justifies that?

[northernladuk]

We've got a sensible answer.. Can we move back to Prof forums please.

[northernladuk]

What in your business justifies that?

Non of his other scams would work.

[AtW]

Could mods clean the off topic in here?
Just asking like....

By the way, thanks for the one or two sensible inputs. And yes, I have a 100% valid business reason to issue A/B shares, as valid as everyone else's.

You need proper tax advisor’s advice (and probably legal too)

[Paddy]

Does anyone use alphabet shares gifted (or better sold at market value) to unconnected persons (e.g. mother/father or friend).

Restructure plan is:

director: 53 ordinary shares
spouse: 47 ordinary shares
new alphabet shares: 2 with full voting rights.

Total 102 shares. director has >51% of Ltd.

Anyone does it?

The cat has 51% of the shares and he insists spending company money on tuna.

[WTFH]

LOL, we got moved to General. That's probably my fault for taking shots at the mods. Rather than clean up their horrible behaviour(!!!!) they moved it to General! Shocking, that!

Kinda.

Also, this guy is regularly trolling the forum with ideas for ways to commit tax fraud lend money from his company, trade shares in his company, etc. If this stayed in Accounting, a newbie might not realise that the ideas were not quite what they seemed, and may use the OPs posts as justification for doing similar.

While the OP may want to be genuine in asking questions, as long as he evades/avoids giving meaningful information and answering direct questions with direct answers, while trying to bypass the swear filter, he may well find all his latest scams get moved to general.

Many moons ago on another forum we had a section for Bad Advice/Bad Ideas. It wasn't quite "General" but it meant that if someone thought "I wonder could I get my sister's dog to marry my dog and then pay reduced tax on the dividends due to the married allowance"? They'd probably find Garnet/Kolata/etc had come up with the idea already and had been shot down already.
It could also be quite humorous as there were times that regulars would ask a question and the prize would be given to the worst advice given.