Yes, a Minor can be a shareholder. There is no minimum age requirement for a shareholder.
Can you pay dividends to Minors?
This is an interesting question. The board of directors can decide to pay the dividends to the minor, but under the settlement rules, HM Revenue & Customs can come back and say that you are just moving the money around.
Settlements legislation: settlement for the unmarried minor child: settlements legislation
ITTOIA/S624 applies to arrangements where the settlor, or their spouse or civil partner, retains an interest in the settlement. ITTOIA/S629 applies to situations where income not caught by ITTOIA/S624 is paid, or made available to, or belongs to a minor child or stepchild of the settlor (who is neither married nor in a civil partnership). A stepchild includes the child of a civil partner. Where ITTOIA/S629 applies, the income is deemed to be that of the parent for tax purposes and is not treated as the children. The following guide shows how ITTOIA/S629 applies to non-trust arrangements and trusts.
A direct gift of shares to minor children
Mr. and Mrs. X each own 50 of the 100 issued ordinary shares in X Ltd. They each decide to give 10 shares to each of their children aged 12 and 15. The children each then hold 20 shares, 10 from each parent. We would treat the dividends paid to the children as the income of their parents.
Indirect gift of shares from parent
Mr. J owns 60 of the 100 issued £1 shares in J Limited. Mr. J is the sole company director and is the person responsible for making all the company’s profits because of his knowledge, expertise, and hard work. On starting up the company, Mr. J allowed his mother to subscribe to £40 for 40% of the shares but shortly afterward she gifted them to her grandchildren. The circumstances are such that the decision to issue 40 shares at par is a bounteous arrangement (as were the shares in Jones v Garnett). The true settlor here is Mr. J rather than the children’s grandmother. ITTOIA/S629 therefore applies and attributes the dividends received by the children to Mr. J for tax purposes.
This guidance reflects the position for income arising to settlements made on or after 9 March 1999 where the settlor is a parent. It applies also to income arising from additions to pre-existing settlements made on or after 9 March 1999. For income arising from property settled before 9 March, 1999 see TSEM4305.
For Further Guidance & source, Please visit HM Revenue & Customs Website.