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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4949
Experience:  FCCA FCMA CGMA ACIS
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I have a limited company. I want to make my wife a director

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I have a limited company. I want to make my wife a director and pay her dividends. She earns 45K salary. How much tax will she have to pay on the dividends and how do we pay it?

Dividends up to 5K are tax free this tax year, but the concession drops to 2K in 18/19. Dividends no longer have tax deducted, you pay on self assessment at the end or every tax year. Your wife must be a shareholder to receive dividends and you must receive them too parri passu with your shareholding, although you can refuse them. Dividends do not count in the Corporation Tax (CT) computation.

I do hope that you have found my reply of assistance.

Customer: replied 1 month ago.
Thanks for that. I was hoping for a bit more information.After the 5K how much tax will she have to pay on her self assessment.
What are the % she will pay. If I pay her 30K dividends for the year for example.

What other income does she have?

bigduckontax and other Tax Specialists are ready to help you
Customer: replied 1 month ago.
45K salary
Customer: replied 1 month ago.
Could you please answer my questions above, I think i closed it before you could answer.

Thank you for your support.

45K - 11.5K = 25K = 58.5K. Total tax would be 25K @ 40% [10K] and 32.5K @ 20% [6.5K], total 16.5K tax due.

Customer: replied 1 month ago.
Thank you

Delighted to have been of assistance.