Moving away from the UK, withdrawing dividends and closing company

[NowPermOutsideUK]

I wonder if that would make a difference?

If it was cash I would MVl and close the ltd

[Lance]

Does there really need to be a commercial purpose? Might more share capital be the answer

The reason for doing this is obviously to sell shares held in my personal name to the new company and cyrstailse the gain.

Another answer could be to hold my shares in a ltd structure for limited liability protection.

These shares are not being sold at an undervalue but are being sold to a connected party. Does there really need to be a commercial purpose?

GAAR.....

[NotAllThere]

He's asking the same questions elsewhere and getting the same kind of answers.

[Fred Bloggs]

This person is going to get him/herself in a very great deal of pain if they don't go out there and get some proper professional advice. As I said, I am not an accountant or a tax expert for that matter. But I can think of three reasons off the top of my head why this transaction, whose only purpose is to avoid tax, will fail.

[Fred Bloggs]

Does there really need to be a commercial purpose? Might more share capital be the answer

The reason for doing this is obviously to sell shares held in my personal name to the new company and cyrstailse the gain.

Another answer could be to hold my shares in a ltd structure for limited liability protection.

These shares are not being sold at an undervalue but are being sold to a connected party. Does there really need to be a commercial purpose?

My bold. Even three minutes on Google will educate you enough to decide what the answer is to that question. I just did so myself.

[Iliketax]

If it was cash I would MVl and close the ltd

You might need to research the CGT consequences a bit more if it holds property.

And it would be worth understanding stamp duty too.

[NowPermOutsideUK]

You might need to research the CGT consequences a bit more if it holds property.

And it would be worth understanding stamp duty too.

I am aware of the cgt consequences. There is no profit attributable to cgt increase since purchase. It’s the retained profit from years of contracting that is at stake

I am selling shares held in personal name to company b so 0.5% stamp duty is required which I can live with

As to commercial reason for doing this: I want to invest more money in company b and increase the share capital

Edit : My accountant suggested moving a property from personal name to a ltd name in the Uk purely for tax optimisation purposes. That seems to be common on the Uk yet is not subject to gaar or anything else

Yet selling my shares that I own to another ltd (and lending the new ltd) seems to be frowned upon with allegations of evasion etc

[Iliketax]

I am aware of the cgt consequences. There is no profit attributable to cgt increase since purchase. It’s the retained profit from years of contracting that is at stake

I am selling shares held in personal name to company b so 0.5% stamp duty is required which I can live with

As to commercial reason for doing this: I want to invest more money in company b and increase the share capital

Edit : My accountant suggested moving a property from personal name to a ltd name in the Uk purely for tax optimisation purposes. That seems to be common on the Uk yet is not subject to gaar or anything else

Yet selling my shares that I own to another ltd (and lending the new ltd) seems to be frowned upon with allegations of evasion etc

If you pay the stamp duty, report the transaction to HMRC within 30 days under the property rich company disposal rules (terms and conditions apply) and don't come back to the UK quickly so that you are not caught by the temporary non-resident rules then great. If you are caught by the temporary non-resident rules then your "capital gain" will actually be taxed at dividend rates (38.1%) when you return because of the transaction in securities rules. Business asset disposal relief will just not be relevant.

If it is just as you've described here, GAAR won't be relevant either. Neither would evasion be relevant. Evasion would be relevant if, for example, you are actually resident in the UK and pretend you aren't (or you know you have to report the sale under the property rich company rules and deliberately decide not to).

I'm sure you've already found out about TIS but if anyone else is interested, the example here seems quite similar (except cash v loan): CTM36815 - Company Taxation Manual - HMRC internal manual - GOV.UK

[Lance]

I am aware of the cgt consequences. There is no profit attributable to CGT increase since purchase. It’s the retained profit from years of contracting that is at stake

FYI retained profit from contracting is classed as a capital gain if you sell your shares for profit (that's the capital gain bit), or MVL (same thing as selling shares for profit). Forget how the company made profit. You make profit on your capital investment of £1 (or whatever it was).

[Lance]

If you pay the stamp duty, report the transaction to HMRC within 30 days under the property rich company disposal rules (terms and conditions apply) and don't come back to the UK quickly so that you are not caught by the temporary non-resident rules then great. If you are caught by the temporary non-resident rules then your "capital gain" will actually be taxed at dividend rates (38.1%) when you return because of the transaction in securities rules. Business asset disposal relief will just not be relevant.

If it is just as you've described here, GAAR won't be relevant either. Neither would evasion be relevant. Evasion would be relevant if, for example, you are actually resident in the UK and pretend you aren't (or you know you have to report the sale under the property rich company rules and deliberately decide not to).

I'm sure you've already found out about TIS but if anyone else is interested, the example here seems quite similar (except cash v loan): CTM36815 - Company Taxation Manual - HMRC internal manual - GOV.UK

why wouldn't GAAR be relevant?
It's entire purpose was to catch complex methods of legally avoiding tax. If their complexity can be demonstrated to have been done purely for tax avoidance, then it's caught by GAAR.