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?
- Identify cost savings 124 3
- Companies Made Simple - I guess they don't want our business any more 335 5
- Seeking advice: Director's claim to money 69 2
- Just another average day trying to deal with HMRC 1,593 19
- Member meet up 1 October in London 261 7
- Laptop help needed I bought the wrong operating system 533 11
- Only pref shares. Does it matter 163 5
- Chart of account segments; Balance sheet vs P&L 815 1
- Fees 759 8
- P11D & tax return 265 10
- Freelance/Employee 912 22
- VAT on children's clothing 159 4
- when is a bad debt a bad debt 239 6
- Why do I get the feeling ... 438 5
- Accounting Web - What is happening? 2,443 50
- Concurrent users 457 7
- SEIS: is it ok for co to spend money before the shares are issued? 97 1
- ACCA Special Business Resolutions... 474 8
- Creation of leases out of freehold 167 2
- Selling Business 334 2
- Any knowledge of salesorder.com 437
- Could and would anyone here carry out a hot file review of some non statutory audit work please? 389
- Electric Car 328
- S222 Charge 266
- Corporation tax penalties and fines on the CT600 236
- AIA 212
- IP trans to holding company 209
- Best way to convert Sage data to VT Transaction+ 200
- Car used both in a partnership and sole trader business - how to claim capital allowances? 165
- Career advice needed regarding accouting systems analysis 157