Gifting shares

[martyk]

New to contracting so be gentle please

I established my limited co with 1 share which is in my name.

I would like to "gift" a share to my spouse.

Should I issue myself a new share and then transfer this to my spouse?
or
Can I issue a new share directly to my wife and still be safe under "gifting to spouse" legislation?

Thanks for any assistance.

Marty

[Michael at BI Accountancy]

Hi Marty,

I would suggest issuing a further 9 shares using the SH01 form from companies house.

And then create a share transfer form, which you should sign confirming the transfer (this is an internal document).

Hope this helps.

Regards,

Michael at BI Accountancy

[TheCyclingProgrammer]

Just remember the new shares should be ordinary shares with equal voting rights and rights to capital on winding up as yours so they aren't treated as a gift of income, in order for the spouse exemption to apply.

[aoxomoxoa]

It's worth pointing out that it's a good idea to issue a further nine shares, rather than just a single share, is so you have flexibility in case you don't want a 50:50 share split for whatever reason, either now or in the future.

[northernladuk]

You've got an accountant haven't you?

[martyk]

You've got an accountant haven't you?

Ya, I would be silly not to have lined up an accountant.

His advice is to issue a new share direct to my spouse.
I have read so much about this and the gift status and it still isn't very clear.
If I issue direct , is it still a gift?

Some stuff I have read says it won't be a gift if I issue direct, some other info seems to indicate that it will be.
Just trying to get it right from the get go.

Thanks for all your advice.

[TheCyclingProgrammer]

Why wouldn't it be a gift? By issuing a new share, you're giving away half of your share by dilution rather than giving her one of your existing shares directly, but it's still a gift.

[ASB]

I dont believe it is a gift if a new share is issued directly to her.

currently the op owns 100% of the existing issued share capital.

That is different to saying he is diluted therefore it is a gift.

whether it has any relevance to the settlements legislation is a different question entirely.

if the op subscribed for the new share firdt then it would be a gift. If he reorganised capital, eg with a 1000 for one share split and gave her some then it would be a gift.

[TheCyclingProgrammer]

This seems like a largely semantic distinction. It might not be new share itself that's a gift but the share of the company value and all the rights that come with that is what is being settled.

I can't remember if the Arctic case involved a new or existing share but I don't honestly think it matters.

[ASB]

Yes, it is largely semantic.

I wasn't trying to imply that is she buys a new share it is all all right. There is still a settlement, just the share itself is not a gift.

WI think there was some consideration as to how the shares were acquired in the Arctic System case. Whether or not it would be of significance I don't have a clue.