Ltd Company - Shares - Retirement

[daisyflower]

Hi Wonder if any one can give advice

My husband and I run our own Ltd company setup with 50 shares each.

My husband retires in 2011 so next year he will receive £16k lump sum from the council, and will start picking up his company pension, as well as his state pension.

Obviously at the moment we have the smallest wage (£450 pm each and take the dividends.)

With my husband receiving this money a few questions have arisen.

1) Can he remain a company director - even when retired
2) The company is 50/50 between us, does this mean that we have to each take the same dividend out of the company - or can we take different amounts.

Our worry is if he continues to take a wage, and the pension, and any dividends he will end up paying most of it back in tax.

So what is the answer - can we adjust the shares say 80/20 so he receives less dividend, and therefore won't hit higher tax rates.

any advice would be gratefully received

Thanks in advance

 

[akirk]

yes he can remain a company director

you can set up a new class of shares so that you hold 50% each, e.g. 50 shares in Ords and 50 shares in A Ords (or 100 in each to make life simpler as you only have to create shares not buy them back in then)

you can then pay different dividends to each class, each year adjusting it for optimal tax purposes - it gives you maximum flexibility.

Alasdair

 

[elaine@cheapaccounting]

If you husband is working why he is taking a salary of £450 / month?

I would suggest a chat with your accountant on some tax planning

 

[daisyflower]

Actually its £475 pm, that is the monthly wage we both get from the company - the rest is made up of dividends

 

[elaine@cheapaccounting]

Actually its £475 pm, that is the monthly wage we both get from the company - the rest is made up of dividends

But is he getting a wage else where?

 

[daisyflower]

No he isnt - only from our company.

 

[elaine@cheapaccounting]

Oh right - thanks

IMO there are not enough details to give the best tax planning advice here for your husband's retirement.

As I said - have a chat with your accountant to put in place the best plan