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?
- Accountancy practices - are you closed over Christmas or do you let your staff take it off? 958 29
- You know its over 344 4
- HMRC BACK AND FORTH FIGHT ON BTL PROPERTY ALLOWANCES 490 9
- How do you find shareholders of a Cyprus Company ? 220 13
- Valuing my fast-growing internet business for transfer of goodwill on incorporation 177 2
- HMRC won't let me set up online DD for PAYE 162 2
- What is the amount of dividends received as a shareholder that requires registration for self assessment? 252 3
- Cocaine anyone? 515 8
- Late Registration for VAT 492 13
- EIS/SEIS 146 1
- Amortisation of Goodwill 277 1
- TaxCalc Accounts production 419 5
- Depression - HMRC penalties case won because of this illness. 426 12
- Solicitors now, Accountants next 721 10
- How come if you claim benefits you are not entitled to you either have to pay a 50% penalty or are sent to court and either fined or sent to prison (sometimes suspended) and end up with a criminal record. 557 10
- ACCA - still making me laugh 592 4
- Personal pension 403 9
- Legal Aid Agency claims and VAT 223 1
- How much of your work is admin? 1,220 11
- Petrol expenses for self-employed 176 3
- Hive up 492
- Accounting referance change & deficient accounts. 458
- corporate hierarchy 439
- Advice - 272
- Anyone had HMRC refusing to act on EPS database glitch? 227
- WWOOFers 218
- Co. limited by Guarantee now closed 208
- Art Gallery - Splitting a property between business and personal use 202
- Tax liabilities in USA for warehoused products 182
- Mutual Trading - Exempt CT Income - Do I need clearance? 175