A & B shares
Apologies if these seem daft questions, but I think dinosaurs were roaming the earth last time I had anything to do with different classes of shares.
I have a couple of Ltd. Co. clients with husband & wife as sole directors and equal shareholders but where one of them now has substantial other income. When dividends are paid this either gives rise to higher rate tax on one director, or the dividends have to be limited to the higher rate threshold, resulting of course in wasted basic rate allowance for the other director.
It seems to be fairly evident that one director cannot waive his or her dividend where they are husband and wife, so I was considering the option of having A and B shares where different rates of dividend can be paid on each; this would also reflect the effort put in by each director. There’s been quite a bit on the forum about this and I can see that the process is not entirely guaranteed to be watertight although it does seem to be thus far, but questions are:
- Can husband simply give all his ordinary shares to his wife, and these become A shares ? Presumably there would be no CGT implications between spouses.
- Are there then any problems with issuing B shares to the husband ? If, say, 100 new B shares were issued can they simply be at £1 each off the directors’ loan a/c as the original shares were, or does the actual value need to be taken into account somehow, as several years down the line the original shares are now worth considerably more than par. I imagine the directors would wish to remain basically equal shareholders in the businesses.
- As to issuing the B shares, is it simply a matter of sending in the relevant form to Co. House and, if necessary, amending the Memo & Articles ?
- How to reward a long standing employee 84 1
- Office 365 vs. Google apps 223 5
- Are you going to Tick and Bash on 21 May? 1,493 43
- Unqualified accountants filing SATR, VAT returns etc for clients 113 3
- New intermediaries reporting requirements 179 2
- Windows 7 to 8 should I go Excel or Office 365 169 3
- Special dividends & CGT 273 2
- flat rate scheme 631 17
- Attachment of Orders 106 1
- Sage instant account codes 261 2
- Allocation of income from property 244 7
- Protocol to be followed for professional clearance 169 2
- Turnover on a tax return 705 13
- UK tax exposure 390 7
- Companies House Presenter Account 176 3
- regulated mortgage work? 228 3
- Employer Making Employee Calculate own Holiday Pay 187 1
- Non-UK resident - where to pay income tax? 291 8
- What do young accountants know that you don't? 2,301 11
- How much would you charge for an interim audit? 566 8