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Do I disclose a wife's (non-director) dividend with dividend to directors or seperate disclosure?

Do I disclose a wife's (non-director) dividend...

We have a client where by himself and his wife are 50% shareholders, where he is the sole director. They are both remunerated by way of dividend.

For disclosure purposes should you include in the dividends paid to directors, the dividends paid to the wife or just the sole director? And, if the wife's dividend is not included, should there be a separate disclosure in the related party notes?

Any example of how this should be presented are welcome!




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27th Jul 2012 15:59

You disclose dividends full stop.

The requirement to declare directors' dividends went out with flared trousers.

You show the dividends paid in the notes to the accounts. One aggregate figure regardless of who received them.

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27th Jul 2012 17:46

Dividends - related party

According to CCH accounts disclosure checklists (March 2012) the FRSSE requires disclosure of dividends to directors as a related party transaction.

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27th Jul 2012 18:13


It's a myth to think that dividends to directors must be disclosed as related party transactions. There is nothing in the FRSSE 2008 nor the Companies Act 2006 (nor any earlier Companies Acts) that states this. Indeed the FRSSE at paragraph 15.1 states which transactions should be recorded - broadly commercial transactions (buying and selling) and financial assistance transactions (loans and the like).

The various RPBs are in denial and have advised its members to declare dividends as related party transactions even though they've had three opportunities in the past seven years via the FRSSEs to put this down in print.

Dividends will usually be disclosed as a total figure in the reconciliation of reserves note. It is also acceptable to show dividends on the face of the profit and loss account (but only after the reserves brought forward are shown) thereby carrying out this task on the p & l rather than as a note.

The problem with relying upon software or listening to the RPBs is that you can lose the ability to think for yourself.


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28th Jul 2012 15:03

agree 100% with thomas no. 34

I agree with Thomas no. 34 on this issue.

It's an urban myth. Ok, it's no big deal, usually, but this doesn't change the facts.

I questioned this recently with the esteemed commentator on financial disclosure matters, Mr. Steven Collings.

refer to my various postings in the earlier thread:

The only explanation given for the requirement to now disclose dividends was the changes to the directors report ie there no longer being a requirement to disclose director's shareholdings in that document.

As I pointed out in the earlier thread, this is a red herring.

Disclosing directors beneficial shareholdings doesn't and never did disclose dividends paid to director shareholders.

Simple example:

100 shares issued.

Husband owns 60

Wife owns 40

Husband is director

Wife is company secretary.

£100,000 dividends paid

£60,000 to husband

£40,000 to wife

The disclosure in the director's report did not disclose this information.

Director's report would have disclosed the following: The director has a benefical interest in 100% of the share capital of the company. The point is that the husband's and wife's shareholding are amalagamated for the purpose of this disclosure, as it was the director's beneficial interest in the company which was the disclosure requirement.

I never did get an answer to my question in the earlier thread.

I will repeat it here:

why is it now correct to disclose dividends to related parties when it was correct not to disclose them in the past?

The answer is, of course, there is or was no requirement to disclose dividends to related parties, either now or in the past.

As Thomas no. 34 has correctly pointed out: It's a myth.





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31st Jul 2012 09:59

@TonyKelly - can you say why there is no requirement to disclose dividends?

Are you saying that there is no transfer of an asset?


FRS 8 para 19 is clear that what is included are examples, and there is no doubt that a dividend paid to a director is a transfer of an asset to a related party. Are you also going to claim that issues of shares to related parties don't need to be disclosed? Or loans?

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31st Jul 2012 10:20

Please refer to earlier threads on this matter

Listen, I do not wish to start debating this matter again, as it has been discussed many times on this forum eg, see the following:

The point I am making should be pretty clear from my posting above.


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31st Jul 2012 10:28

On that thread you say that as the accounting standard doesn't specifically say dividends they don't need to be disclosed. Given FRS 8 says "examples" that's clearly not a sufficient reason, so I was wondering what other basis you had.

I note your comments regarding previous disclosures on beneficial ownership but I don't see how that addresses current requirements.

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to Portia Nina Levin
31st Jul 2012 11:00

Ok, Mr. Limey, one last time

Firstly, let me say, I don't really care whether dividends to directors need disclosing or not.

The point I am making, or thought I was making, is as follows:

The goalposts have been moved by various parties.

First, for many years, it is correct not to disclose dividends to directors as related party transactions.

Then, suddenly, the correct procedure is that dividends should be disclosed as related party transactions.

The reason given was a change to the directors report. This is a red herring as previously pointed out, as it was impossible to to know what dividends were paid to directors from the directors report: eg husband and wife companies, change of shareholding during the year, dividend waivers, different types of shareholding,  and probably many other examples I can't think of offhand.

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01st Aug 2012 09:11

Dividends to directors have always been related party transactions - I think it's you who are bringing in the red herrings. FRS 8 requires disclosure of related party transactions if not disclosed elsewhere in the financial statements. Therefore if the beneficial ownership of shares was not equal to the number of shares owned when dividends were paid, that would have required separate disclosure.

If such disclosures were not being made that was not because of any gap in disclosure requirements, but because the rules were not being followed (perhaps because people didn't fully understand them).

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