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Selling business to spouse

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    Selling business to spouse

    I currently own a limited company which has been trading for 10 years. I have lost the passion to drive my business forward. Maybe its due to the fact I have been working 18 hours per day for the past 10 years. I am completely exhausted. I am looking to sell the business and move into property development. Instead of selling it to 3rd party, I want to sell it to my wife since she has been helping out for the past 2 years. She can easily take over the business. Has anyone done this before? Will there be any issues?

    #2
    If the motivation behind selling your business is to access its retained value to invest in property investment, then how is selling this business to your wife going to generate any money as you will effectively be selling it to yourself?

    How will your wife fund this purchase without using the company money, on which she would have to pay income tax or will she be using the money you personally already enjoy access to in any case?

    Comment


      #3
      Do you actually need to sell it? Make her a director if she isn't already, hold a director's meeting and record minutes stating your intention to resign and pass the business over to her, gift the entire shareholding to her and resign as director. There might be some tax benefits to retaining a small shareholding in the business, but either way, I don't see why you need her to buy the business.

      Comment


        #4
        Originally posted by TheCyclingProgrammer View Post
        Do you actually need to sell it? Make her a director if she isn't already, hold a director's meeting and record minutes stating your intention to resign and pass the business over to her, gift the entire shareholding to her and resign as director. There might be some tax benefits to retaining a small shareholding in the business, but either way, I don't see why you need her to buy the business.
        Because there is probably more to this than the first post suggests as per Patrick's questions possibly?

        Just to add some pertinent details that might affect the advice.. From last year the OP said..

        Hi guys, In the past 10 years I have managed to build up £700k surplus cash in my limited company. I already spoke to couple of IFA regarding investing this money since I am only getting around £50 interest from HSBC business saving account.
        Last edited by northernladuk; 3 February 2017, 12:13.
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #5
          Surely if you sell the business to your wife, you would have to pay CGT on the gain, and she would pay stamp duty. It just seems like an unusual way of say "here taxman, have some money". She would simply be taking money from the marital assets to give to you to put back in the marital assets.

          Leaving you with less money to buy property with.
          Taking a break from contracting

          Comment


            #6
            Tax Planning

            Originally posted by northernladuk View Post
            Because there is probably more to this than the first post suggests as per Patrick's questions possibly?

            Just to add some pertinent details that might affect the advice.. From last year the OP said..
            That was my first thought as well, missing a few potentially key issues.

            There's a number of different scenarios/options depending on the OP circumstances, without wanting to bash an old drum, speak to your accountant directly or instruct someone and discuss your situation in full.

            Comment


              #7
              Sale

              Originally posted by chopper View Post
              Surely if you sell the business to your wife, you would have to pay CGT on the gain, and she would pay stamp duty. It just seems like an unusual way of say "here taxman, have some money". She would simply be taking money from the marital assets to give to you to put back in the marital assets.

              Leaving you with less money to buy property with.
              Depends on the structure of the business. Husband/wife CGT exemption. Presume the business is in a limited company, therefore transfer of shares. Lots of issues.

              Comment


                #8
                I have actually managed to reduce my surplus cash via VCT so that's not my main concern. There is still around £300k in surplus cash. I can simply let my wife run the business under my name but then if I setup another company, I will be liable for additional tax. This is the reason I am looking to transfer/sell the business to my wife. I guess I need to find a different solution. Maybe simply setup the other company under my wife's name and make no changes to existing company structure. This might be the easiest option.

                Comment


                  #9
                  I just can't help thinking a one paragraph question asking how do you do something with a business with over 300k in it is really going to get any kind of useful answer.
                  'CUK forum personality of 2011 - Winner - Yes really!!!!

                  Comment


                    #10
                    Originally posted by northernladuk View Post
                    I just can't help thinking a one paragraph question asking how do you do something with a business with over 300k in it is really going to get any kind of useful answer.
                    What information would be helpful?

                    Comment

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