Share split - Tax issues

2 shareholders have different income requirements. Can we split the shares without tax implications?

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A small trading company has 2 unconnected shareholders owning 50% each of the same class of shares.

One shareholder (A) wants more income than the other (B) and the other shareholder is happy with the extra as an addiitonal employer contribution into his pension.

If A wants £60k and B wants £30k, can the B shareholder waive his entitlement to £30k of dividends or alternatively, can shareholder A be offered an A share and shareholder B a B share to pay different dividend levels without any tax implications for this issue?

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By FactChecker
20th Jun 2024 22:38

"A small trading company has 2 unconnected shareholders owning 50% each of the same class of shares.
One shareholder (A) wants more income than the other (B) and the other shareholder is happy with the extra as an additional employer contribution into his pension."

Shareholders and dividends ... then you suddenly switch to "employer contributions".
So are these people also Employees? If so with what Salaries? And how will Pension contribs compare to the salary?

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Stepurhan
By stepurhan
21st Jun 2024 09:05

Dividend waivers are possible, but come with their own complications. There are other ways of achieving the stated goal. Whether those other ways are suitable for the individuals concerned is a matter for discussion between them and a suitable accounting professional.

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