Readers’ forum: Wavering waiver

My husband and wife clients are 60:40 shareholders in a limited company in which he always earned the fees. The arrangement seems to fit within the principles of the case of Jones v Garnett [2007] STC 1536 known colloquially as ‘Arctic Systems’ so I am confident that her dividends have not been assessable on him.

This year the husband has inherited some money and would prefer not to pay higher rate tax on dividends from the retained profits in the company so I am considering a dividend waiver.

As I understand it this waiver should be in writing and this should be effective as long as the company has the distributable profits to pay the full amount if it was not waived.

But the following question has now occurred to me: suppose the company has distributable reserves of £50 000 and declares it...