Partner's limited company

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DroneOn
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by DroneOn » Sun Mar 11, 2018 11:28 pm
I'm a year into my IVA and my partner wants to start doing some additional work on the side of her full time job. I'm not going to sugar coat it - we want to shield this additional income from my income and expenditure reviews so that our child has a nest egg.

I know that she is well within her rights to simply decline to provide her income and they would assume a 50/50 split of expenses; but my salary is more than hers so I'd prefer for her to disclose her income.

If she were to setup a limited company (nothing to do with me) and pay herself minimal or no dividends, effectively stockpiling cash in the company, would I be in breach of my IVA?
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Foggy
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by Foggy » Mon Mar 12, 2018 8:02 am
DroneOn wrote:
I'm a year into my IVA and my partner wants to start doing some additional work on the side of her full time job. I'm not going to sugar coat it - we want to shield this additional income from my income and expenditure reviews so that our child has a nest egg.

I know that she is well within her rights to simply decline to provide her income and they would assume a 50/50 split of expenses; but my salary is more than hers so I'd prefer for her to disclose her income.

If she were to setup a limited company (nothing to do with me) and pay herself minimal or no dividends, effectively stockpiling cash in the company, would I be in breach of my IVA?


Yes it would breach the IVA -- hiding assets is contrary to the agreement and tantamount to inviting a fraud charge. The company would be expected to pay normal dividends and to only withold enough capital at year end to satisfy it's need for working capital. If the whole scheme was started from scratch, it might be different ... but, as you are already business partners you could be viewed as manipulating the situation so as to deprive creditors.

I would say, get the nose to the grindstone and get the IVA over and done with, in the normal course of events .. no shenanagins .. no surprises ... and work on the child's nest egg afterwards (rather than risk it all now).
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Lisa Thomas
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by Lisa Thomas » Mon Mar 12, 2018 9:53 am
I'm not sure they are already business partners Foggy?
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Foggy
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by Foggy » Mon Mar 12, 2018 10:07 am
Lisa Thomas wrote:
I'm not sure they are already business partners Foggy?


In another thread the OP is exploring ways of supporting the partner in his previous business, without being financially involved although they have worked together in this enterprise for some time.
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Lisa Thomas
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by Lisa Thomas » Mon Mar 12, 2018 10:08 am
Thanks for clarifying.
DroneOn
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by DroneOn » Mon Mar 12, 2018 10:38 pm
Foggy wrote:
Lisa Thomas wrote:
I'm not sure they are already business partners Foggy?


In another thread the OP is exploring ways of supporting the partner in his previous business, without being financially involved although they have worked together in this enterprise for some time.


Thanks Foggy, but actually, this is a completely separate question from my other thread. Taking a bird's eye view, I can see how you might think I was rewording the same thing a different way; but:

I work full time PAYE
My wife works full time PAYE
I work as a sole trader
I have ceased all work as a sole trader for the time being
My wife works full time
My wife used to work as a sole trader
She may want to resume that work at some point in the next five years, either as a sole trader or as a ltd
She may also want to take ownership of my sole trader work. At the moment, there is no formal partnership and no limited company. She simply does some of my work when I'm too tired (and she's better at it than me!)

Again, I feel like my questions sound as if I'm scheming up ways to game the system; rather I'm trying to optimise my wife's additional income so that it isn't all consumed by MY past mistakes.
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