Anthony Newgrosh (BLK Tax) answers a query on the tax consequences of giving an adult child shares in a private family company.
in a family company to children so as to allow them to receive targeted dividends by way of beer money is not new. This is typically done through the use of either alphabet shares (i.e. separate classes with bespoke dividend rights) or dividend waivers. However there are a number of potential pitfalls in setting up such arrangements both for family members and more generally for other individuals.
