Technical Tuesday | Dividend only shares скачать в хорошем качестве

Technical Tuesday | Dividend only shares

Dividend-only shares - tax avoidance or genuine tax planning? 😬 We see so many companies issuing dividend only shares to key members of staff. My question is, how often is this for genuine commercial reasons and how open to attack is this planning from HMRC? Share awards and options are a fantastic way to incentivise key members of staff BUT dividend-only shares have no rights to voting or capital, so how often are they achieving genuine employee incentivisation. Issuing dividend-only shares purely as a remuneration strategy, in my view simply doesn't work (see PA Holdings for example). If there is an intention to pay dividends from the outset there is a strong argument that the net present value of those dividends should constitute the share value meaning an upfront income tax charge for the employee. Even if that isn't the case, if the dividends are nothing more than disguised remuneration then HMRC could attack these an, as a minimum, subject NIC to the payments. Worse still, there must be thousands of companies out there operating under the false pretence that HMRC will not take issue with this, even if they don't, they'll have issue when the company is finally sold in convincing a due diligence team its all above board! I always try and warn clients of these types of issues if they are seriously considering share awards as a remuneration planning strategy, here's a video 👇