New company - can shares be issued to under 18's?

New company - can shares be issued to under 18's?

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I have a new client who previously had an accountant who approved (with a previous company) the client's minor children having some alphabet shares which attracted around £12k of dividends each year.

Can someone guide on the legality and practicality of this please?

We are now looking at a brand new company so there wouldn't be any value - yet.

Replies (6)

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By Tim Vane
29th Jan 2019 21:05

Can’t see a problem legally. The dividends are of course taxable on the parents so as long as they are declared on the parents’ returns there should be no legal issues.

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Replying to Tim Vane:
paddle steamer
By DJKL
29th Jan 2019 23:36

Used to be what grandparents were for.

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Replying to DJKL:
ALISK
By atleastisoundknowledgable...
30th Jan 2019 08:53

DJKL wrote:

Used to be what grandparents were for.

Not sure what any of my son’s are for.
“Can you babysit, I’ve got loads of stuff to do at home that can’t be done with him here”
“Yes, if you take us to Trafford Centre, get the pram out, change his nappy, then come and pick us an 1.5hrs later”

We live 45mins from Trafford Centre.

OR (from this week)

“Your daughter (Mrs ALISK) and grandson a v v ill. I’m super busy, I’ll work from home, but can you be here 10-3 (outside nap time) so I can do some work?”
“Yes of course, anything to help”

She (mother-in-law) was here 11 & 2, during which I changed 3 nappies, made lunch for all 4 of us, set up ‘Little Baby Bums’ on Netflix twice and made a bottle. Did about 15 mins work.

Sorry for the rant; bet you weren’t expecting that from a throw-away comment!

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Replying to Tim Vane:
paddle steamer
By DJKL
29th Jan 2019 23:36

Used to be what grandparents were for.

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Replying to Tim Vane:
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By Hanleymail
29th Jan 2019 23:45

Thanks Tim but I understand that the rationale behind the previous arrangement was that the dividends would be (not) taxed on the kids!

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ALISK
By atleastisoundknowledgable...
30th Jan 2019 08:45

My son received c shares in my co when his grandmother bought them for his first birthday.

Unfortunately the v small co is run by only my wife and I, so the tax God Tim Good advised that dividends would still be taxed on me. Assuming growth, he’ll have them for no value when no longer taxed on me, so there’s that at least (and IHT).

We don’t know enough about the company circumstances, but there’s every chance that the divs should have been taxed on the parent.

See the Jeremy Vine case - IHT planning.

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