Chistmas giving Part 2. By Nichola Ross Martin

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Nichola Ross Martin, of the Practical Law Company looks at PAYE settlement agreements and how to gift private company shares this Christmas...

Last week, Jim Shaw, who (ignoring all best practice in corporate governance), is both chairman and CEO of Aardvark Enterprises Limited (AEL) decided to gift his long serving secretary, Debs, some shares for Christmas.

The shares in AEL are only subject to income tax in her hands, because they are not readily convertible assets, but Jim thinks it only fair if the company picks up her tax tab. He also needs a bit of advice on the tax treatment of her dividends.

PAYE settlement agreement

AEL can pay Debs tax under a PAYE settlement agreement. The tax liability then beco...

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15th Dec 2008 15:39

well its cash out for the company again so maybe just give them the bounus after all, best wishes Nichola

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