Should you add your children to your business or company as shareholders and directors?
Shaz looks at the advantages and possible disadvantages of bringing your children into your business and the differences it can make to your tax.
There are many aspects to consider from the age of your children to the implications with lenders and how it can help with capital gains tax. Shaz shares great information that will help any business owner with the decision around adding their children to the business.
KEY TAKEAWAYS
You can add children as shareholders at any age, to be a director they have to be 16 or over with limited exceptions.
If you give capital assets to them it reduces your capital gains exposure.
For children who are minors any income over £100 pounds will be taxable on you.
There can be negatives to having children as shareholders;
-Different shareholders can fragment the business and people may not be able to agree.
-Certain lenders don’t like children as shareholders.
-The perception can be difficult with employees who may themselves have an expectation of shares in the future.
If you give children shares over a number of years it means you can limit your capital gains tax.
If your children were born before 2 January 2011 you can use a child trust fund
BEST MOMENTS
‘Gifting earlier will help with your capital gains tax’
‘The child can relinquish their obligations’
‘If you try to give something away regularly you limit your exposure to capital gains tax’
VALUABLE RESOURCES
shaz@aaa-accountants.co.uk
ABOUT THE HOST
Shaz Nawaz is a serial entrepreneur; he owns five thriving businesses in diverse sectors.
Shaz is committed to helping business owners build successful businesses. Having conducted over 3,000 business growth consultation he has helped his clients generate millions in additional profits. His purpose is to inspire business owners to build businesses that are hugely profitable and sustainable.
He is a huge advocate of having multiple streams of income. He has written a number of business books and regularly contributes articles to mainstream media outlets.
You can find Shaz on:
Facebook
YouTube.
