I have limited company. Can I add anyone (my friend) as shareholder and get the dividend on hos name to avoid some percentage of tyax? Is this legal.
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Yes you will avoid tax, but you will do so by avoiding the income. If you think that is a good idea you are not thinking straight.
Yes...but
If your friend is a shareholder, those shares come with all sorts of rights, including voting on directors, ability to sell the shares.
If your friend receives a dividend, that dividend belongs to him. It's taxable on him (and affects any rights to benefits), so he might not actually want it. And because the dividend belongs to him, he might not want to pass it back to you.
Or are you thinking of an imaginary friend?
What a nice Christmas present for your friend!
If you look back, amit2452 asked a similar question around this time last year.
Hi AmitI have limited company. Can I add anyone (my friend) as shareholder and get the dividend on hos name to avoid some percentage of tyax? Is this legal.
You've previously said:-
. It would be best to speak with him / her and take their advice. I am a director of a limited company. My VAT filing is handled by my accountant ....
Yes - you can add anyone (me) as a shareholder and that will reduce your tax. I might even pay you for the shares.
How much is the friend paying for the shares? And will they give the dividend straight to you?
Ill happily take your money if you don't want it. No bothered about the tax bill on free cash.
Thanks all for your responses and volunteers ;-) but after doing some research, its suggested that person should be your spouse else HMRC could trouble with settlements legislation (formerly known as Section 660) :-(
I think you have completely misunderstood section 660.
Having your spouce or indeed any person as a shareholder who does F all work for the company is exactly who section 660 is aimed at.
In other words giving shares to your wife has no impact on avoiding settlements legislation since its aimed specifically at avoiding paying extra tax and ni. I doubt very much your wife will buy the shares and I doubt she will be bringing in 50% of the income either.
I think you should have the decency to at least speak to your own accountant before asking others.
amit2453 wrote:
Thanks all for your responses and volunteers ;-) but after doing some research, its suggested that person should be your spouse else HMRC could trouble with settlements legislation (formerly known as Section 660) :-(
I think you have completely misunderstood section 660.
Having your spouce or indeed any person as a shareholder who does F all work for the company is exactly who section 660 is aimed at.
In other words giving shares to your wife has no impact on avoiding settlements legislation since its aimed specifically at avoiding paying extra tax and ni. I doubt very much your wife will buy the shares and I doubt she will be bringing in 50% of the income either.
I think you should have the decency to at least speak to your own accountant before asking others.
The OP probably has but doesn't like the answer
What tax are you trying to avoid? Having shareholders you will still be paying CT.
PT? You will pass liability to somebody else, unless you pay minimum amount which is not taxable.
You can even give all your shares to your friend and pay no tyax! This is legal, and all subsequent dividend tax will be hos.