I am about to enter an IVA. I'm employed full time and also self employed as a sole trader. The intention was to cease all self employed freelance work once the IVA started, because I really only did the work to cover my debts. I already work 60+ hours a week and the extra work stresses me and I'd like to have as little as possible to do with it.
But now, my wife has asked if I can transfer the business to her. She is on maternity, will only return to work part time and would be happy to take up the day to day running of the business and do the actual work; however, without my knowledge of the industry, contacts, advice and hand holding, the business would not work. I would have to remain involved at some level and so - as I see it - she could not - in good consciousness - operate as a sole trader. The only alternative would be a partnership, but given how little I'd personally be involved with the business, I wouldn't seek to claim profits from the partnership and would want any profits she made to be shielded from the contributions to my IVA.
Is there a way to walk this tightrope without falling foul of my obligations to my creditors and HMRC?
I'm afraid I don't know - hopefully one of our industry experts will be along to advise.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Is the business worth anything? if so you will have an issue in transferring it across to her as it will effectively be an asset you are giving away for free.
As long as there is no value in it then I see no problem in you helping you wife for free.
Thanks for the response. No the business is not worth anything; it's simply me helping clients out. My wife has been helping me out (for free) for many years and so can pick up the day to day work without any issues.
My concern is that my IP or creditors might think I am shielding income from them by forming a partnership and receiving little or no personal profit from the business. I suppose in a way, I am; but I am faced with three options:
Give up the business altogether and get some of my life back (my original intention)
Continue doing all of the extra work and passing 100% of the profits to my creditors
Allow my wife to take over the work, which she will only do if she profits from it
It feels on some level like I'm trying to game the system - but really I'm just trying to make the best of bad situation for all involved.
DroneOn wrote:Any other thoughts would be most appreciated
If you are making a profit from the business then it IS worth something and this looks as if you want to put it in your wife's name, continue working at it and have those profits go to her instead of your creditors.
DroneOn wrote:Any other thoughts would be most appreciated
If you are making a profit from the business then it IS worth something and this looks as if you want to put it in your wife's name, continue working at it and have those profits go to her instead of your creditors.
I see your point but without my low level involvement, this particular business doesn't work. Imagine you're a master whiskey barrel maker and people buy your barrels from around the world because they know you and they know you make the best barrels. You teach your son to make the barrels and he becomes just as good as you. Without your contacts and your name on the barrel, all he has is some old timber; but if he makes the barrels, surely he should get a bulk of the profits?
