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My Boyfriend Asked Me to be a Shareholder in his Small Company – Why Would he Do That? #AskAMS

Is your boyfriend a higher rate taxpayer? If he is, it will lower his income if his Company pays some dividends to you. It might then save him a significant amount of tax (32.5% on some of his dividends) whilst giving you a small amount of tax to pay (7.5% on some of your dividends).

Here are a few things to understand:

Firstly, being a Shareholder is not the same as being a Director. A Shareholder has no responsibility for the Company – unlike a Director who has many legal duties.

Secondly, your boyfriend must actually pay you your share of the dividends (into your bank from his Company account). Paying him the money straight back is not an option, nor can he do it as just a bookkeeping entry because HMRC could tax him on your dividends.

Finally, he should consider the share’s Market Value in case there is a Capital Gains Tax issue (but this seems unlikely).

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My Boyfriend Asked Me to be a Shareholder in his Small Company – Why Would he Do That? #AskAMS

Is your boyfriend a higher rate taxpayer? If he is, it will lower his income if his Company pays some dividends to you. It might then save him a significant amount of tax (32.5% on some of his dividends) whilst giving you a small amount of tax to pay (7.5% on some of your dividends).

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