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I am looking at paying my wife a Salary of 8k from the Company
she is a basic rate Tax Payer and I understand the 8k would be taxed at 20% s o net she has £6400 and £1600 tax on PAYE
This is my question
If I pay myself 8K I pay 40% Tax which is £4800 and £3200 PAYE
If I want to pay us more would I be better off paying my wife a larger Salary I know she will pay NI and the Company will pay NI too
but what would the total tax & NI bill be if I paid her over the 8K limit
I have a total mind block on this
If anyone has a simple PAYE calculator please post the link
I hope this makes since lol DL
Option 1 Pay my wife 8k 20% Tax
Option 2 pay her 16k 20% Tax plus NI and employer NI
option 3 pay my self 8k and myself 8k 40% Tax
which is the most tax efficient
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
Option 4 Pay her £8k and another £8k dividends. No Ni and the first £2k tax free and only 7.5% on the balance
I did think of that
But if I pay her dividends do I not also have to take dividend income
the shares in the company are 70% in my name and 30% in my wife's name
and if I took the dividend tax I would pay a lot of tax 32.5% plus 19% corp tax
have I got this right
If you make it so that you each own different classes of share (eg Class A and Class B), then you can pay different dividends to each share class.
Landlord | PaTMa Founder | http://www.patma.co.uk | Property and Tenant Manager
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is that hard to do and what's involved ?
I've done it before for a non-property company and that was straight forward - it did involve some (official) paperwork though. I assume SPV companies would work the same.
This may not exactly fit your situation but it looks like a reasonable outline of roughly what's needed: https://www.informdirect.co.uk/shares/ne...ss-create/
thanks for that DL
That sounds like the same principle as a Family Investment Company?
I hadn't come across a Family Investment Company before, but from a quick look they do seem to utilise different share classes as well. Often to provide different rights (voting/control) as well as dividends I think.
Isn't £5000 dividend tax free?
No I think it was cut to £2000