Partnerships - Wife as sleeping partner
At a recent Lexis Nexis course, Tim Good discussed the option of introducing your wife as a sleeping partner to avoid a Class 4 National Insurance liability. The one particular part of this I was unsure about relates to the investment required by the wife. In Tim's example, he said that his wife invested £15k to become a partner in PTP.
This has given rise to a couple of questions that (unfortunately!) I didn't think about on the day:
1. Is the investment an integral part of being able to class the wife as a sleeping partner and, therefore, remove the charge to Class 4 NIC?
2. Does the level of the investment have any bearing on the amount of profits that can be allocated to her?
If anyone can shed any light on these queries, it would be most appreciated.