Selling business to spouse

[northernladuk]

What information would be helpful?

You bank details and online password.

[jmann]

You bank details and online password.

Please check your PM. Details have been sent.

[TheCyclingProgrammer]

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.

As I said in my first post, transferring the business into her name is easy. Make her a director, resign as a director, give her the entire shareholding. The business is now hers. No CGT between spouses and no stamp duty as no consideration. If she bought the business from you at market value there might be a stamp duty charge.

I'm guessing what you're really saying is if you dispose of your shareholding, even for free, would you be entitled to a share of the business reserves? I don't know the answer to this but I suspect its a complicated issue so you should almost certainly speak to your accountant. My hunch would be that you wouldn't.

[northernladuk]

Please check your PM. Details have been sent.

Good man, got them. Because I'm the helpful type I've been in and solved your conundrum for you

[jmann]

As I said in my first post, transferring the business into her name is easy. Make her a director, resign as a director, give her the entire shareholding. The business is now hers. No CGT between spouses and no stamp duty as no consideration. If she bought the business from you at market value there might be a stamp duty charge.

I'm guessing what you're really saying is if you dispose of your shareholding, even for free, would you be entitled to a share of the business reserves? I don't know the answer to this but I suspect its a complicated issue so you should almost certainly speak to your accountant. My hunch would be that you wouldn't.

I didn't even think about that. That would be the best option for me since I am not really interested in extracting the surplus cash. That can be done over a long period. I simply want to slow down and work in a different field. Thanks for the suggestion.

[northernladuk]

When you say your wife has been helping you and can easily take over. I assume she will continue to work for the company bringing in revenue etc? It's not a standard one man band with tax mule wife IT contractor set up?

I bet she's over the moon you've decided to go do something fun and she's taking on a company that needs 18 hours a day work by herself

[jmann]

When you say your wife has been helping you and can easily take over. I assume she will continue to work for the company bringing in revenue etc? It's not a standard one man band with tax mule wife IT contractor set up?

I bet she's over the moon you've decided to go do something fun and she's taking on a company that needs 18 hours a day work by herself

I simply wanted to sell the business but she wants to take over. I am going to let her run the business by herself for couple of months to see if she can handle it. If she wants to carry on then I can simply resign as a director. Otherwise I need to find another solution.

[TheCyclingProgrammer]

I didn't even think about that. That would be the best option for me since I am not really interested in extracting the surplus cash. That can be done over a long period. I simply want to slow down and work in a different field. Thanks for the suggestion.

Well still check with your accountant because IANAA. However if this isn't about the cash, then I can't see why you wouldn't need to do anything more complicated than what I suggested. Some minutes documenting what you intend to do would probably be useful too.

Just remember you won't be entitled to any dividends from the company if you relinquish your entire shareholding though if your other business is doing well I don't see why that would be a problem.

Also there's a difference between giving the business to her and letting her take over running it. The latter only really requires she becomes director and you resign.

[SlipTheJab]

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[NickNick]

Giving your wife 300K seems like a disaster waiting to happen.