My original post was related to complimentary upgrade, disregard that.

I've never upgraded for miles after purchase, but I don't see why it wouldn't work as normal. That is to say, if the fare your ticket on is eligible to purchase an upgrade via miles (and U space is available) then their fare will be too. As ashill points out below, you cannot split the companion fare - but they will both be on the same fare class. The companion seat is not given a separate discounted or fare class to my knowledge (at least it doesn't display anything on my companion booking).