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DLA Husband ad Wife

PoodlePoodle Experienced MentorRegistered Posts: 711
Hi

If you have a small company run by a husband and wife, both being directors with one ordinary share each, would it be aceptable for them to accept joint and several liability for the DLA and go 50/50 each at the financial and tax year end? Or do you have to pull everything apart and create two separe DLA's?

I have a situation where both husband and wife are claiming monthly expenses and mileage but resimbursements for these sums plus salary and extra amounts, pending the voting of dividends, are all going to their joint private bank accounts by transfers and cheques. Cash from ATM's is also being withdrawn, different amounts by both parties.

Poodle

Comments

  • peugeotpeugeot Experienced Mentor Registered Posts: 624
    Hi Poodle,

    Do you remember pre April 2007 when the directors report used to contain the Director(s) shareholding?

    If Mr A (director) held 50% and his wife (non-director but Co. sec) held another 50%, then Mr A actually had a beneficial interest of 100%, and Mr A holding would be disclosed in the directors report as 100% - this is because his immediate family (spouse) held the balance of the shares. Your case is similar albeit the wife is also a director.

    The amendments (post April 2007) only remove the disclosure requirements, not the actual concept. You can, therefore, split the total withdrawals 50/50 and in your client's scenario it is fairly common to treat them as equal. If the shareholders are not married and unrelated then sometimes it is common to segregate the withdrawals. However, in this instance where the shareholding is equal but the dividends declared differ, then a dividend waiver must be done for the shareholder receiving the lesser dividend. In husband/wife run companies, it is much simpler to split the withdrawals (though no doubt in the future a finance bill will be passed prohibiting that also!!)

    Best wishes
    Steve
  • PoodlePoodle Experienced Mentor Registered Posts: 711
    Much appreciated Steve.

    I will now confidently reconcile off the DLA and and recommend an amount for voting as a dividend

    Poodle
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