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?
- Annual tax investigation cover fee? 542 15
- RTI submission different to HMRC 1,589 28
- Unemployed Accounting Graduate - Need Advice - Small Firms 395 8
- SA online - 4 hour limit 1,353 15
- Surprise visit from HMRC! 2,614 19
- "Audit Report" 180 3
- Free invoicing software 239 3
- When are ltd companies "associated" for Vat and tax purposes? 136 2
- IR35 deemed payment and dividends - practical considerations 213 4
- IR35 Low, medium or high risk 110 1
- 100% Annual investment allowance on luxury cars 764 19
- Terminal Losses - Online filing 214 4
- VAT on Hire Purchase 238 2
- Coding Notice 261 6
- UK company paying dividend to foreign shareholder 280 6
- New business - journal entries 438 22
- Is CGT roll over relief available for let property 245 3
- Payroll software 668 16
- Statutory accounts, current company address, or one that was correct at EOY? 305 5
- Are there Special Rules for Agencies? 416 10
- Auto enrolment excuses 913
- Feedback on accounts production software for IFRS 727
- Add T&Cs to Sales Order in Sage 418
- Social investment tax relief 225
- Digita Hosted Software 221
- accounting for this transaction 213
- Call Centre Data Costs 207
- Problems with Sage 50 Payroll v21(2015) 191
- Incorporating Sole Trade and bringing in spouse 184
- Travel costs and contractors 179