Paying a spouse or family member
Salaries or dividends – the options explained
Bringing your spouse, partner or family into the company can be entirely legitimate and tax efficient. It has to be set up properly, because HMRC looks closely at arrangements that exist only to move income.
Salary
A salary must reflect genuine work at a commercially reasonable rate for that work. Done properly, it uses their personal allowance, is deductible for the company, and can build their state pension record.
Dividends through shares
Dividends require them to own shares. An outright gift of ordinary shares to a spouse or civil partner is a well-established and accepted arrangement. Arrangements involving non-spouses, special share classes or dividend waivers carry more risk under the settlements rules, so take advice before setting anything up.
💡 Good to know: Share transfers also have company secretarial and potential Capital Gains Tax angles. Speak to us before any change and we will coordinate the whole picture.
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