Call for Assistance: 02033 259 341
Spondoo Accounting
Call for Assistance: 02033 259 341
Spondoo Accounting

Can I pay dividends to my children?

July 5, 2024

If you add your child as a shareholder in your limted company (others words gift them shares in the business), any dividends will be treated as follows:

Children under 18 – If your kid is younger than 18, any dividends above £100 per year will be taxed in the parents personal tax return.

Children 18 and over – Once your child reaches adulthood (18 and over), dividends they receive are taxed under their own tax bracket.

This can be a tax advantage if they’re in a lower tax bracket than you.

Warning – if you are paying dividends from your personal service company, or a simple business where you are simply billing for your time, you need to be cautious and speak to a tax adviser. HMRC may challenge these practices.

Want to discuss your specific needs? Reach out to us now.

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Information provided on the site is merely guidance that may change in line with UK law and regulations. Users must not consider this to be financial advice or their sole resource when making any financial decision. Spondoo is a trading name for Accounting SQL Limited, authorised & license accounting firm under the Institute of Financial Accountants.
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