Permissions required for revoking Ltd Co. shares

[mouseorgan]

Howdy,

I'm in the middle of a divorce and need to revoke the 50% share allocation from my wise as obviously we're no longer a couple so can't claim the S660A tax allowance.

My accountant was happy to issue meeting minutes to reallocate the shares without anything from my wife or myself, but she believes she needs to sign something for this to happen legally. Nothing explicit was signed to give her the shares in the first place.

Any clues?

EDIT: After reviewing the communications with my accountant I now appreciate that she DID sign a stock transfer form. My confusion was that the J30 is not required to be sent to Companies House in order to enact a change in the stock holdings. As such I did not think it possible to finalise the change in stock without me having first returned the transfer forms to CH. I was wrong in this presumption, and don't wish it to reflect on my Accountant in any way.

[Clare@InTouch]

It's her property, you cannot simply take it back any more than you could just take her car keys or her laptop. She owns them. She needs to sign a Stock Transfer Form to legally more the shares back to you, and your accountant needs to consider stamp duty and the value she's selling them to you for.

She may have been issued shares on incorporation which is why you don't recall anything happening previously.

[mouseorgan]

It's her property, you cannot simply take it back any more than you could just take her car keys or her laptop. She owns them. She needs to sign a Stock Transfer Form to legally more the shares back to you, and your accountant needs to consider stamp duty and the value she's selling them to you for.

She may have been issued shares on incorporation which is why you don't recall anything happening previously.

No, it was after incorporation, 99 more shares were issued, 50 going to my wife, 49 more to me making it 50 shares each. I found an SH01 form that was signed though, now I dig through my emails.

Given that over this time she's actually been living apart with separate funds (predominately me paying her child support) this does make me worry about all sorts of things if she's going to claim half of a company rather than acknowledging it as the tax efficient living arrangement it was.

[b0redom]

Oh dear. I wouldn't take that tack with HMRC if I were you. "Yes I was using this tax avoidance loophole, and now it's not convenient for me anymore...."

I personally would phoenix the company. Sounds like the cleanest way of doing it.

IANAL / IANAA

[Clare@InTouch]

No, it was after incorporation, 99 more shares were issued, 50 going to my wife, 49 more to me making it 50 shares each.

Given that over this time she's actually been living apart with separate funds (predominately me paying her child support) this does make me worry about all sorts of things if she's going to claim half of a company rather than acknowledging it as the tax efficient living arrangement it was.

If they were allocated after incorp then it's a simple form submission to Companies House, and if your accountant did it online then you may not have signed anything.

If your wife owns 50 shares out of a hundred then she owns half the company, and could request payment for her shares. If you don't have control, being over 50%, then there's not much you do without her approval.

Are you still contracting? If so, set up a new company with you owning 100%. At least then you're not adding anything to the company that your wife owns half of. I presume it will still get taken into account in the divorce, but at least there's no issues over shareholdings.

[northernladuk]

Howdy,

I'm in the middle of a divorce and need to revoke the 50% share allocation from my wise as obviously we're no longer a couple so can't claim the S660A tax allowance.

I would have thought you were still allowed it as long as you are married. That won't change until you sign the last piece of paper which could take ages. How much do you have in the company?

[mouseorgan]

Oh dear. I wouldn't take that tack with HMRC if I were you. "Yes I was using this tax avoidance loophole, and now it's not convenient for me anymore...."

I personally would phoenix the company. Sounds like the cleanest way of doing it.

IANAL / IANAA

Well it's not about being convenient, it's about no longer being a couple.

[mouseorgan]

I would have thought you were still allowed it as long as you are married. That won't change until you sign the last piece of paper which could take ages. How much do you have in the company?

I don't want to do it any more, as we're no longer a couple, so doesn't seem appropriate.

[Martin at NixonWilliams]

Are you still contracting? If so, set up a new company with you owning 100%. At least then you're not adding anything to the company that your wife owns half of. I presume it will still get taken into account in the divorce, but at least there's no issues over shareholdings.

I couldn't agree more.

Unless your wife is prepared to give back the shares I would suggest opening a new company. The longer you work through your existing company, the more value you are adding to her shares for the eventual payment of dividends or cash distribution on the winding up of the company.

[northernladuk]

I don't want to do it any more, as we're no longer a couple, so doesn't seem appropriate.

As someone who is unmarried but in a long term stable relationship meaning I cannot take advantage of something like this I would say nuts to appropriate. If it is allowed then hold them to ever letter of the rule.

If it is a personal issue then I appreciate that is a different matter. Saying that I wouldn't go exposing my business to HMRC just because there are issues with how the divorce is going and due to animosity between you... but that's your issue and not for us I guess.