Two Shareholders only one wants to take dividend

[UKSBD]

What is the procedure if only one shareholder wants to take a dividend?

Other shareholder agrees and is happy to waive theirs.

Is it simply a case of holding a meeting, recording the fact that one is waiving rights to a dividend and just issuing the one dividend, or is there more to it than that?

 

[OldWelshGuy]

I don't think legally you can waive it. I think it has to be declared equally or not at all

 

[Bob]

A shareholder may legally waive a dividend if the proper procedure is followed. Have a look here and the next page of the manual. If you have 2 50/50 shareholders and distributable retained profits of £100, then if one shareholder waives their dividend, you can still only pay a £50 dividend to the other shareholder or risk an attack under the settlements legislation

 

[CloudAccountantcouk]

You could change shares so you hold different classes and declare a dividend for type A but not type B?

 

[Bob]

You could change shares so you hold different classes and declare a dividend for type A but not type B?

Agreed or they could issue new A or B shares in addition but will probably need to amend articles of association as well

 

[cjd]

where can I get a shareholder like that?

 

[Bob]

where can I get a shareholder like that?

Maybe marry them??

 

[andygambles]

What is the procedure if only one shareholder wants to take a dividend?

Other shareholder agrees and is happy to waive theirs.

Is it simply a case of holding a meeting, recording the fact that one is waiving rights to a dividend and just issuing the one dividend, or is there more to it than that?

What is the reason for waiving?

If it is because they want to keep funds in the company they could receive the dividend and loan the money back to the company via the DLA.

If it is for higher rate tax reasons then you could agree to defer the dividend to the next tax year if all parties agree? (although then the new dividend tax kicks in).

 

[Chris Ashdown]

They one who does not want the divi can always take it, but leave it in the company, they don't have to take it out so in fact they become a creditor of the company, and able to take it out at a much latter date

 

[UKSBD]

What is the reason for waiving?

If it is because they want to keep funds in the company they could receive the dividend and loan the money back to the company via the DLA.

Can they do that if they are not a Director (just shareholder and employee)?

Only reason I want to do it is because I want to Port a mortgage (single application).

By having low income for past few years it makes it harder to move the mortgage (I think, not sure yet as have meeting with them next week)

If the mortgage company take 2015 - 2016 as the latest period I could take a divi now and income will then be fine.

 

[David55]

What is the procedure if only one shareholder wants to take a dividend?

Other shareholder agrees and is happy to waive theirs.

Is it simply a case of holding a meeting, recording the fact that one is waiving rights to a dividend and just issuing the one dividend, or is there more to it than that?

Have 2 classes of shares - A shares and B Shares

 

[FD Analytical Accountants]

The shareholder may want to think in depth about waiving dividends at present particularly with the tax changes coming into play April 16. All depends on the shareholders personal tax position but may be best to take dividends prior to April 16 to reduce any tax liability?