Usually when a company is set up, it is set up with a ordinary shares which then appear in the accounts.
What this basically means, is that when a dividend is declared, all the shareholders receive the amount corresponding to the % of shares owned.
So for example:
If you have a husband/wife shareholding at 50/50, so 50 shares each, if you declare a dividend of £10,000, each person will receive £5,000.
You can’t really do anything about this if you have ordinary shares. It is possible to waive dividends to one party but it can be tricky since the balance sheet has to cover the amount as if it had been paid.
A better way is to create ‘A’ shares. This gives you the option of varying the dividends amount to shareholders and therefore helping you save tax.
If you’d like to look at ‘A’ shares, feel free to email me at russell@rsaccountancy.co.uk
