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03-11-2015 11:17 #11
03-11-2015 11:27 #12Senior Member
- Join Date
- Jan 2013
Take to an accountant to discuss with properly tax implications etc when you get paperwork so you dont get any surprises
03-11-2015 11:31 #13
03-11-2015 11:40 #14
I'm a chartered accountant and I'm just struggling to understand how a company pays out profits to an employee when they don't hold shares and it's not a bonus.
as you say, the details provided on their own aren't enough to come to a solid conclusion.
but there's only a limited number of ways a company is able to legitimately distribute its profits; either as a franked/unfranked dividend (which would require him to be a shareholder) or by way of a bonus (which is taxed and has super paid on it). there's really no other way to do it so please keep us updated about more info on option 2. it's got me curious now
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03-11-2015 11:53 #15Senior Member
- Join Date
- Sep 2009
03-11-2015 11:55 #16
Be cautious about the definition of "profit". There are many ways this can be interpreted for this purpose. It can also be impacted by non-cash items (depreciation, impairment etc) and items outside the control of your DH.
03-11-2015 11:56 #17
that's not really possible though. the husband and wife partners would be taxed on the partnership distribution at year end each. why would they then "gift" anything to anyone? it makes no sense at all.
03-11-2015 11:56 #18Senior Member
- Join Date
- Apr 2012
03-11-2015 11:58 #19
you'd definitely want a very clear idea of what he's going to get and what his share of profit is to be based on.
03-11-2015 12:00 #20
Take the tax out of the equation. You'll pay tax on option 1 and option 2 so it doesn't really matter.
Go for whatever will bring the highest gross income.
Personally and based on what information you gave I'd go for option 2.
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