I run a limited company with a friend, and we're looking to make some withdrawals from retained profit from the company. Our shareholdings are split 50:50. He would like to take £33,000 as a pension withdrawal, whereas I'd like to take the same amount as a dividend. We have sufficient reserves to cover both transactions. How would we go about sorting this, if allowable? 

Arthur replies: 

If you look at HMRC’s guidance in its Trusts Settlements and Estates Manual at TSEM4220 and TSEM4225, it would appear that, assuming the other shareholder is not your spouse, you can do as you have written. But see HMRC’s Company Tax Manual at CTM15205 under the section headed 'Dividend waivers', which indicates that the waiver must be before the dividend payment is made to the other shareholder. The dividend waiver should be properly documented.