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  • Tax

    Need assistance with PAYE calculation

    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

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    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

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    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


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    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.


    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.

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    Landlord | PaTMa Founder | http://www.patma.co.uk | Property and Tenant Manager

    Try our buy-to-let profit calculator or property browser extension for free.

    is that hard to do and what's involved ?



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    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.

    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/

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    Landlord | PaTMa Founder | http://www.patma.co.uk | Property and Tenant Manager

    Try our buy-to-let profit calculator or property browser extension for free.

    thanks for that DL

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    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.

    That sounds like the same principle as a Family Investment Company?

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    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.

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    Landlord | PaTMa Founder | http://www.patma.co.uk | Property and Tenant Manager

    Try our buy-to-let profit calculator or property browser extension for free.


    Isn't £5000 dividend tax free?

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    No I think it was cut to £2000

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    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.