Company structure and dividends

[AlC1]

I intend to create a company with myself, my son and my wife as equal share holders. If we each are issued a different class or type of share ( to reflect the amount of time or capital we have input into the company) can we each receive different amount of dividends in the accounting year, ie can one share type be worth a larger dividend than another and is this differentiated income accepted by the Inland revenue

My thanks for any assistance on this question

[deanshepherd]

Hi Allan

Rather than mess around with different classes of share, why don't you just own different numbers of shares?

This would probably be the simplest way of giving you the result you are looking for.

Dean Shepherd
dean.shepherd@mmi-online.co.uk
MMI Accountancy
www.mmi-online.co.uk

[AlC1]

Essentially I would like my son to have at least a third share if not more of the company, but he would like to draw less of the dividend than we would as he is a higher rate tax payer

[King_Maker]

Esoteric share structures, dividend waivers etc usually invite close scrutiny from HMRC.

If the aim of the structure is not to artifically avoid tax, manipulate assets etc, then it's usually acceptable.

More data would be required to give more meaningful advice.

[AlC1]

To clarify then I would have to satify the Inland Revenue beforehand?

The aim of the structure is essentially to keep ownership in the family but to allow my son to participate as a third shareholder (as most of my concerns are in my and wifes names) to have a significant holding in the concern.