Alphabet shares for directors
A company currently has two full time directors with shares split 60:40. Other than their connection through the company, they are unrelated.
They do not currently take salaries from the company but take rents for the company's use of the business premises and dividends, both pay higher rate tax and director A (60%) has another source of income.
Director B (40%) has a requirement for a higher level of income from the company than director A and director A is quite happy for him to do so.
It has been suggested that the current ordinary shares be split into A (60%) and B (40%) to enable different rates of dividends to be paid, but retaining rights to 60:40 capital on a sale, wind up etc.
I feel that if the directors had been say, husband and wife, then potentially the settlements legislation could be in point, but has anyone any experience of HMRC arguing the point in the scenario outlined above?
- About to buy a block of fees. Any advice? 1,754 11
- capital gains on PPR 338 18
- 100% Xero practice 2,589 49
- Shutting down a company with creditors 1,552 33
- Is it possible to retrospectively change the tax year that dividends were paid. 727 29
- Devolved HMRC? 80 1
- PAYE 252 5
- What accounting software is there for Irish Accounts? 207 2
- Working from home - time apportionment 182 1
- incorrect PAYE statements 248 3
- TMA 1970 - fixed penalties appeals 127 1
- Cloud based payroll sofware? 496 8
- Does anyone use quotation software? 151 2
- Any Scottish members out there? 12,130 452
- What is the best, tax efficient way to sell 40% shares in your start-up business for approx £1m 437 5
- Claiming depreciation on a company vehicle 343 10
- What code do you put expenses under such as tea & coffee? 444 10
- How can customer service quality vary between the basic pension firms? 392 5
- Is there an expert in Excel out there? 581 10
- Will this AIA be disallowed when asset transferred to Ltd Co 351 12
- Raiders of the Lost Tax File 1,326
- Chartered Accountant in County Down N.Ireland 488
- National Insurance 378
- Non Resident 302
- Franchise income and costs 267
- Hands on experience of Digita 223
- Best way to take money from a business if you have unlimited EIS allowances? 198
- Employer's Helpline 170
- employment capital allowances 167
- CIS paid under reg 9 162