Moving away from the UK, withdrawing dividends and closing company

[Iliketax]

So if there was a way to sell my £1 share for the market value to a connected party then that would help a lot.

Just sell it then. But how does that help you extract anything other than £1 in Switzerland.

[NowPermOutsideUK]

Just sell it then. But how does that help you extract anything other than £1 in Switzerland.

Im keen to understand Ramsay because that could be applied to anything and as I already asked about the well known tax dodge of moving personal property from personal name to Ltd to avoid S24 tax - That is happening up and down the country and yet it is purely for tax avoidance reasons. So far I have not had a satisfactory answer on why that is allowed if Ramsay holds true

As for your question about how it helps - Think about it for a minute :


1) I have £1 share which has a market value of £100 (for arguments sake).
2) I could take the money out as a dividend and therefore reduce the value of the share but I would have to pay tax in the foreign jurisdiction (UK does not charge divi tax or capital gains tax)
3) If however I sold the £1 share to CompanyB for £100 I have a capital gain which is neither taxed in the UK or Swiss. I then receive £100 from Company B for the share holding in CompanyA. Of course company B would have funds for this either in upfront cash or via a negative director loan

So it makes a very big difference on which way to play this as dividends are expensive and capital gains are tax free

[eek]

Ramsey doesn't hold because stamp duty (and capital gains tax) is paid as the ownership of the property changes

Yes there are supposedly ways of avoiding both but none have worked when HMRC comes asking.

[NowPermOutsideUK]

Ramsey doesn't hold because stamp duty (and capital gains tax) is paid as the ownership of the property changes

Yes there are supposedly ways of avoiding both but neither have worked when HMRC comes asking.

Fair enough - However in my scenario where I sell CompanyA shares to companyB both stamp duty at 0.5% and CGT are also levied. The only difference is CGT in both jurisdictions is zero and 0.5% is a lot less then what dividend tax would be

So are you turning full circle to say that if there is no commercial reason other then tax avoidance its all fine despite the ramsay principle?

It cannot be the case that shifting property from personal to Ltd for tax avoidance is fine but selling shares in companyA to companyB is completely wrong - Do you see my point?

[northernladuk]

Aren't you missing something fundamental here. You aren't shifting the property to a LTD. You and Ltd are completely different entities. You are selling the house to the Ltd. It's a transaction between two unrelated (in law) parties.

I think by being so flippant about what happens is clouding the issue and that aside you are still comparing apples and pears.

[eek]

Fair enough - However in my scenario where I sell CompanyA shares to companyB both stamp duty at 0.5% and CGT are also levied. The only difference is CGT in both jurisdictions is zero and 0.5% is a lot less then what dividend tax would be

So are you turning full circle to say that if there is no commercial reason other then tax avoidance its all fine despite the ramsay principle?

It cannot be the case that shifting property from personal to Ltd for tax avoidance is fine but selling shares in companyA to companyB is completely wrong - Do you see my point?

But you control both companies - therefore they are the same in HMRC's eyes (third party entities with the same controller).

Which is different to transferring a property from personal ownership (one tax regime) to company ownership (a different tax regime).

[NowPermOutsideUK]

Aren't you missing something fundamental here. You aren't shifting the property to a LTD. You and Ltd are completely different entities. You are selling the house to the Ltd. It's a transaction between two unrelated (in law) parties.

I think by being so flippant about what happens is clouding the issue and that aside you are still comparing apples and pears.

Im not following you at all

I move property from MyName to CompanyA and that is fine because different entities

I move ownership of shares (by way of sale) of companyA from MyName to CompanyB and that is bad because what exactly ? Two different entities involved in this just like the property sale

[eek]

Im not following you at all

I move property from MyName to CompanyA and that is fine because different entities

I move ownership of shares (by way of sale) of companyA from MyName to CompanyB and that is bad because what exactly ? Two different entities involved in this just like the property sale

Because life is unfair - deal with it.

[NowPermOutsideUK]

Because life is unfair - deal with it.

I m more interested in applying reasoning and logic to come to conclusions you see rather then fanciful thinking

That is why I gave you an example clearly of a disposal being done for tax avoidance which is encouraged

And when a contrived sale of shares is mentioned out comes ramsay and others with no thought process applied

[eek]

I m more interested in applying reasoning and logic to come to conclusions you see rather then fanciful thinking

That is why I gave you an example clearly of a disposal being done for tax avoidance which is encouraged

And when a contrived sale of shares is mentioned out comes ramsay and others with no thought process applied

But you didn't give a clear example - you gave an example that had zero relationship to what you are now trying to do.

Look we know you completely screwed up the purchasing of your properties (which clearly annoys you so much that you continuely refer back to property) but Iliketax has pointed you at am example that is a 100% identical version of what you are trying to do and you can see how HMRC will treat it - HMRC have spent 50 odd years removing every means possible of easily transforming income into capital gains. It's a game so old and closed down so often that's it's not surprising no one can help you anymore.