Starting a pension in Ltd company

garybarlowsbeard

She has her own job, she might help me in the loosest sense of the word in the same way I help her with advice and so on so any such move would be purely for tax purposes which, though it has crossed my mind doesn't interest me. But that's also another debate anyway.

TheTracker

If your wife is made a shareholder then there’s no legal issue paying dividends (indeed you must if you are receiving them, the legal issue is if you don’t pay her dividends!). Such cases have precedent - HMRC has lost in attempts to prevent such distribution of spouse owned company dividends when only one party earns the fees. She can always use the dividends to personally top up a pension?
And if a director, then it’s a lot easier to justify paying a pension than if she was an employee but not a director. Directorship comes with remunerable responsibilities that a 5k admin job does not.

garybarlowsbeard

But the only reason I would make her a shareholder would be to avoid paying tax on another £5k. Changing to 2k soon enough. Hardly seems worth it and I'm happy to pay my taxes.

atush

Seems worth it to me, and isnt really tax avoidance. You are married, you share the worries and the gains. If you split, you'd have to give her part fo the company anyway.

But its your money to flush away or not. Me, i'd be saving the tax.

ComicGeek

The OP's business partner is likely to have an issue though, depending on the what ownership ratio as well. Not something that I would be happy with in their situation, adds a lot more complication for some small tax savings by the OP - no benefit to me as the business partner, I would refuse.

ComicGeek

*share ownership ratio