Shares for family
Client is doing very well, thank you, despite the economic gloom for everybody else. The co-founders and shareholders now regret not issuing shares to spouses and minor children when the company started. What would be the tax implications if they now rectified that?
Spouses both work a bit in the business but the familial relationship would presumably exempt these shares from the employee share rules? But would the dividend income be at risk of attack as a settlement or similar? (I'll admit at this point that the tax treatment of shares seems to have developed into a lacuna in my knowledge).
Dividend income on the minor children would still be taxable on the parent, I assume. Is it still possible to avoid that problem by way of a trust (ignoring the practical problems with trusts for a minute) or was that effectively knocked on the head a few years ago when it was all change? If, on the other hand, a hit is accepted now by gifting the shares directly to the children, what happens re the income once they reach the age of majority? Does it just become their income or would there still arguably be a settlement?
Many thanks in advance for any and all responses.
- Tips on meals 148 2
- Buy Samsung Galaxy Note 5 509 10
- Rental losses on jointly owned property 134 3
- Personal Tax 720 13
- Overpaid In Employers NI - RTI EYU for hundreds of employees 146 2
- Stumped - IHT 109 2
- Leaving the VAT FRS Scheme or trying to stay as long as possible? 406 6
- No PAYE Registration but need auto enrolment 470 11
- HMRC now overriding SA bank repayment details on tax returns 1,280 33
- Credit management tools 118 1
- property capital gains 123 1
- Write an article on latest tax changes for landlords. 771 20
- Incorporate to utilise dividend allowance next year? 383 7
- CGT and primary residence 163 1
- Marriage Allowance 258 3
- Private doctors - Ltd company vs partnership 1,149 12
- S455 and February year ends 316 7
- HMRC having technical difficulties 886 18
- Closing down loss-making company 451 5
- S.455 Tax again 287 3