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Thanks this is helpful and I agree that it is necessary to watch out for the dividend allowance using up the band it falls into. It may not be beneficial to transfer shares when the spouse's income is around £43k or £100k.
Unless the shares are new shares issued after 17 March and held for 3 years wouldn't the new shareholder also have to be an employee to qualify for entrepreneur's relief?
OK got it. So any transferee would have to be made a Director or put on the payroll to qualify for entrepreneur's relief on any future sale (assuming >5% held for >12 months).
Thanks v much for this article Rebecca -an article that is not long such that it can be printed out and given to clients. If anyone wants to know the practicalities of creating Alphabet shares here is an article written in checklist format: 'Alphabet Shares: Get the Details Right'
https://www.accountingweb.co.uk/business/finance-strategy/alphabet-share......
the article also details the Settlement rules.
Sorry... two comments from me - I'm still not used to the new loading - now I've got to see how to delete one post...
Of course it is not a tax deductible expense in regards to corporation tax thinking from a micro business point of view.
what is the posiiton where Overseas dividends are received- with say a wihtholding tax deducted @ source, with net received [ ie USA under a w8BEN ]
So, is this Tax allowable against TAX bill with the shares net div used as part of the allowance, - or do the tax and dividends get otherwise treated in a return
Would the £5,000 dividend allowance be available to a non uk resident. Person is out of UK but would be classed as temporary non resident at present as only out of country for 2 years.
good to know - one Q - can a minor holding shares receive dividend from a ltd co and will div belong to minor or parents - when parents are also shareholders/directors in same ltd co ?
Useful article, thank you.
Companies formed after 01.10.2009 don't have to worry about the Authorised Share Capital part, do they?
It's also worth noting that new shares can only be issued in accordance with the Articles or the Companies Act. Where there are already 2 shareh0lders (e.g. husband and wife) and they wish to vary their shareholdings or split them between different classes, it is most important that they follow the correct procedures to the letter for the new shares to be valid. In some cases, this may mean the shareholders giving formal authority for new shares to be issued in a written resolution, subscribing for them in proportion to their existing rights, and then transferring a given number in order to achieve the desired ownership.
As an alternative, they could always sub-divide the existing shares into smaller units (say 1 x £1 into 100 x 1p) using Form SH02 and then transfer the desired number to their spouse. This has the advantage of not requiring new shares to be issued, although you still have to watch the settlements legislation. In particular, it should be an outright gift with no strings attached.
Shares to spouse, and use of the £5,000 band, must be exercising many of us, but I am unclear on several detailed aspects, having read:
https://www.accountingweb.co.uk/any-answers/issuing-new-shares
So, newco (ish), 2 years old, one spouse has the only one share.
For shareless spouse to get shares:
Is there any distinction for tax and forms to complete between transfer and new issue?
What if the shareless spouse is employed as a bookkeeper / administrator?