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?

Thanks

Comments
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Should not be a problem

Euan MacLennan |
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"one" word .....

BKD |
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In practice

girlofwight |

P A Holdings

BKD |
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PA Holdings - appeal

Tonykelly |
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I don't agree

Steve Kesby |
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I agree with Mr Kesby.

Hansa |
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Steve

BKD |
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@BKD

Steve Kesby |
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Good point

mr. mischief |
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Apples and oranges

BKD |
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Fair enough

mr. mischief |
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I don't think there can be an Arctic II

Steve Kesby |
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to clarify

BKD |
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ir 35

nick farrow |

I agree, Nick - on the point about genuine risk

BKD |
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Sources please

Ernest N Dever |
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I agree with BKD

gbuckell |

Thank you for everyone who

TROGGY |

There is a useful review of

Exector |

Employment Related Securities

martin.jackson |

Its a grey area

Nichola Ross Martin |
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how about the case

nick farrow |

Congratulations to all contributors

alandawson61 |

RE: How about the case

martin.jackson |

many thanks Martin

nick farrow |

Are they employment-related securities?

Ernest N Dever |
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thanks Ernest

nick farrow |

I cant/wont compete with the

blok |
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As this is the discussion of the year....

Tom 7000 |
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