Directors remuneration as office holder

Directors remuneration as office holder

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In a family company with four directors, two husbands and two wives, for attending Directors Meetings as office holders, say, four times a year, what remuneration can reasonably be paid to the wives?

They take absolutely no other active part in the day to day running of the company, nor are they ever likely to do so. One of the husband's has a neighbour with whom he has discussed this (!) and was told that he pays his wife £15,000 p.a. as a director and this has never been challenged by the Revenue.

It would be useful to think that they could each be paid at or near to the personal allowance each year, but is this reasonable, can one "get away with more"? The settlement rules spring to mind!
Colin Steen

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By stephenkendrew
25th Jul 2007 07:40

use a bit more imagination!
I'm sure that with a little more imagination you could easily justify a salary of £100 per week for the wives in terms of work they do.

Do they ever go to the bank, discuss the business with their husbands, visit the company premises and do any filing or put the kettle on, clean the company vehicles, take telephone messages, make appointments for their husbands etc etc.

I cannot see the point of paying a "non-working" wife a salary of £15,000. It runs the risk of being disallowed by failing the wholly and exclusively test. If the director is a basic rate taxpayer it would be much cheaper for him to pay his wife a lower salary and take the rest out as dividends.

Even if he is a 40% taxpayer, there would be very little difference.

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By AnonymousUser
25th Jul 2007 13:52

I tend to agree with Mr Kendrew
but I would add that you don't need to worry about the settlement rules any more (not until new legislation anyway) so pay the wives £5,000 each salary and get some shares to them for dividend payments.
This is subject to somebody clever (possibly somebody named Rebecca) writing an analysis of what you can and can't do following today's House of Lords judgment.

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