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Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33802
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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There, I am the father of 2 children I have

Resolved Question:

Hi There,
I am the father of 2 children for whom I have been paying maintenance through the CSA.
I am the sole director and employee of a small company contracting engineering services. I am a minority shareholder in the company (my parents are the majority shareholders.
I have just been reassessed by the CSA who claim that as a sole director, all the dividends declared by the company are classified as my income, even though the majority is paid to my parents.
My question is whether there is any legal basis (e.g precident / judgement) which justifies their actions?
Thank you in advance,
Gavin.
Submitted: 1 year ago.
Category: Law
Expert:  Clare replied 1 year ago.
Hi
Thank you for your question.
My name is Clare
I will do my best to help you but I need some further information first.
How did your parents come to be Shareholders in your company?
Clare
Customer: replied 1 year ago.

Hi Clare,

This is how my accountant set things up at the outset to make things tax efficient. Both my parents are retired so they can benefit from the dividends without incurring tax liability.

Hope this helps,

Gavin.

Expert:  Clare replied 1 year ago.
Hi
So they have made no direct contribution to the firm whatsoever?
Clare
Customer: replied 1 year ago.

Hi Clare,

Other than helpful advice, no.

Gavin

Expert:  Clare replied 1 year ago.
Hi
I see
Then I am afraid that the CSA can indeed do this
It is contained in S71 here
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/184683/cmec-si-csmc-regs-2012.pdf
This replaced earlier provisions discussed here
http://www.newlawjournal.co.uk/nlj/content/could-do-better
Please ask if you need further details
Clare
Customer: replied 1 year ago.

Hi Clare,

Not the answer I was hoping for, but thank you for your prompt and efficient replies.

I just have one further question, if the directorships changed such that my parents were joint directors and I was just an employee without directorship, would this change the situation?

Thank you

Gavin.

Expert:  Clare replied 1 year ago.
Hi
Highly unlikely given the circumstances you have outlined
Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33802
Experience: I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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