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Husband/Wife company large redundancy payment to wife

Husband/Wife company large redundancy payment...

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Client company is ceasing to trade. Husband is director and main earner as an IT Consultant. He has now got a job as an employee and company is closing. Wife, who is company secretary, does minor admin work and is paid £600 a month. Director wants to pay her £14k redundancy and says this is in her contract (terms are half annual salary for each full year served).

This seems very generous.

Would HMRC accept this so that expense is allowable for CT and tax free for wife.

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By bduncan
16th Mar 2012 09:54

It is not tax free for the wife as it is contractual.

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Replying to youngloch:
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By rushtonp
16th Mar 2012 10:13

Presumably this would not be a PILON if the wife had received correct notice of her redundancy?

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