The introduction of the £5,000 tax free dividend allowance has tempted many family company shareholders to give shares to other family members so that they can be paid £5,000 a year tax free. (Note that this allowance reduces to £2,000 from 6 April 2018).
Such a strategy needs to be carefully structured as there can be Capital Gains Tax on the gift of shares, and HMRC may also seek to tax the dividend as employment income under certain circumstances. The dividend will also be taxed on the parents if received by a child who is a minor.
If you are considering giving shares to other family members and then paying dividends, talk to RS Partnership in Welwyn so that they can deal with this correctly.
RS Partnership, accountants, tax specialists and business consultants based in Welwyn Village, have been providing accountancy services in Welwyn Hatfield and Hertfordshire since 1998 and are known for their expertise and personal, friendly approach designed to support you and your business every step of the way.
Member since: 26th September 2014
As the owner of thebestof Welwyn and Hatfield my mission is to help local independently owned businesses to grow and community groups, charities, local sports clubs, societies to thrive. If you know a...
The following Cookies are used on this Site. Users who allow all the Cookies will enjoy the best experience and all functionality on the Site will be available to you.
You can choose to disable any of the Cookies by un-ticking the box below but if you do so your experience with the Site is likely to be diminished.
In order to interact with this site.
To help us to measure how users interact with content and pages on the Site so we can make things better.
To show content from Google Maps.
To show content from YouTube.
To show content from Vimeo.
To share content across multiple platforms.
To view and book events.
To show user avatars and twitter feeds.
To show content from TourMkr.
To interact with Facebook.
To show content from WalkInto.