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Dividend waiver.

RobjRobj New MemberRegistered Posts: 9
Small Ltd. Company with 2 directors - Father (51shares) Son (49) shares. Son would like to withdraw dividend for property purchase. Father does not require funds at present and would prefer to leave funds in Co as a reserve, although not for any particular imminent expenditure. There is no problem with the amount of distributable profits as no dividend has been taken for a number of years. If a dividend waiver were to be put in place would this be likely to attract the interest of HMRC as a "settlement"? This situation is likely to occur again the future as the Father has considerable other income outside the Company.
Any advice much appreciated.

Best Answer


  • burgburg Experienced Mentor GloucesterModerator, FMAAT, AAT Licensed Accountant Posts: 1,441
    Dividend waivers are always really difficult and in my experience best avoided. It may be better to create a different non-equity share class for such a purpose.

  • RobjRobj New Member Registered Posts: 9
    Many thanks. I'll look up the cases mentioned. Wasn't keen on the idea of different classes of shares as son will eventually inherit Company and I feel that it would cause complications then.
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