Can I Give Shares from My Company to My Child? #AskAMS

I assume you intend to minimise tax by shifting dividend income from your tax return to your child - I’m asked this quite often because of the new dividend tax which came in April 2016.

If your child is under 18, then your dividends would still need to be shown on your tax return (a law called s.660b).

Also, any transfers of shares to a connected person – apart from a spouse – would mean that the shares must be valued at market value and Capital Gains Tax may be due – so a tax calculation will be needed.

Finally, if you do transfer shares to a child over 18, you must make sure any dividends go to the child and don’t end up back in your hands – otherwise, HMRC may consider it to be tax manipulation.

If you have a genuine desire to pass on the business to your child – you should seek advice.