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Our client Mr A provides information technology services. He previously operated as a sole trader but now operates as a small limited company.
Mr A and his wife Mrs B are both directors and 50% shareholders in the company. Mr A is paid a salary of £16 000 (as the main worker) and Mrs B has £4 000 (she has other employment). Given that both are directors will the Jones v Garnett case apply so that any dividend income of Mrs B should be taxed on Mr A?
In addition Mr A acquired a contract for work (valued at £150 000) prior to the incorporation of the company. Can the company pay Mr A any goodwill for this as presumably any value for personal goodwill in a capital gains tax computation will be refused by HMRC?
If a payment is in...
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