Originally posted by NotAllThere
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Share buy back
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Originally posted by jayn200 View PostThe basics of it is that you don't actually extract any money when the company buys back the shares... it just increases the value of the shares, you still need to sell them onto to someone else... which just isn't available as an option in any legal reasonable way to a 1 or 2 (in case of spouses) person contractor LTD as a means of distributing profit... and even if it was... the share buyback itself would do nothing as you own 100% of the shares anyway and their value is directly 1 to 1 value to net assets in company.
The company buy back the shares you own at a price you are willing to accept (or the price they enforce on you if your shareholders agreement allows it), for cash.
Some buy backs offer you to have more shares instead of cash, but not all.See You Next TuesdayComment
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Originally posted by Lance View Post
rubbish. That's exactly what it is. A buy back. They buy them back.
The company buy back the shares you own at a price you are willing to accept (or the price they enforce on you if your shareholders agreement allows it), for cash.
Some buy backs offer you to have more shares instead of cash, but not all.Comment
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In the spirit of the forum title "All hope abandon ye who enter here. Seriously." I will try and add a different persepctive
1) Contractor starts his Ltd with 100 shares at £1 a share
2) Contractor works and after ten years the company has £1MM in cash at bank account
3) contractor sells his shares to a relative / friend for proper market value which means capital gains on the disposal of £1MM profit
4) If however he moves to say Switzerland where shares and CGT are not applicable or another jurisdiction then the entire bank balance is the contractors with no tax to pay
5) The new owner of the Ltd then liquidates the company and withdraws the 1MM - Because he bought it for 1MM there is no profit
Would love to hear serious answers to why this would not work rather than "Its too complicated and you wouldnt understand it"
Have a great Wed!Comment
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Originally posted by NowPermOutsideUK View PostIn the spirit of the forum title "All hope abandon ye who enter here. Seriously." I will try and add a different persepctive
1) Contractor starts his Ltd with 100 shares at £1 a share
2) Contractor works and after ten years the company has £1MM in cash at bank account
3) contractor sells his shares to a relative / friend for proper market value which means capital gains on the disposal of £1MM profit
4) If however he moves to say Switzerland where shares and CGT are not applicable or another jurisdiction then the entire bank balance is the contractors with no tax to pay
5) The new owner of the Ltd then liquidates the company and withdraws the 1MM - Because he bought it for 1MM there is no profit
Would love to hear serious answers to why this would not work rather than "Its too complicated and you wouldnt understand it"
Have a great Wed!
It's not even worth starting to dig down that rabbit hole.Last edited by northernladuk; 6 October 2021, 10:52.'CUK forum personality of 2011 - Winner - Yes really!!!!Comment
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No its not simplistic at all - I have actually thought about that for a while but was reluctant to share it for fear of getting ridiculed for pointing out clear tax optimisation strategies- Please explain in an executive summary (few sentences) where the big gaps are so that I might improve my knowledgeComment
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Originally posted by NowPermOutsideUK View PostIn the spirit of the forum title "All hope abandon ye who enter here. Seriously." I will try and add a different persepctive
1) Contractor starts his Ltd with 100 shares at £1 a share
2) Contractor works and after ten years the company has £1MM in cash at bank account
3) contractor sells his shares to a relative / friend for proper market value which means capital gains on the disposal of £1MM profit
4) If however he moves to say Switzerland where shares and CGT are not applicable or another jurisdiction then the entire bank balance is the contractors with no tax to pay
5) The new owner of the Ltd then liquidates the company and withdraws the 1MM - Because he bought it for 1MM there is no profit
Would love to hear serious answers to why this would not work rather than "Its too complicated and you wouldnt understand it"
Have a great Wed!
But you'd better not return to the UK within 5 years or you'll be taxable in the UK on the full amount as though you'd taken a dividend or capital distribution in the year of return.
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Originally posted by NowPermOutsideUK View PostI have actually thought about that for a while
Comment
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Originally posted by NowPermOutsideUK View PostIn the spirit of the forum title "All hope abandon ye who enter here. Seriously." I will try and add a different persepctive
1) Contractor starts his Ltd with 100 shares at £1 a share
2) Contractor works and after ten years the company has £1MM in cash at bank account
3) contractor sells his shares to a relative / friend for proper market value which means capital gains on the disposal of £1MM profit
4) If however he moves to say Switzerland where shares and CGT are not applicable or another jurisdiction then the entire bank balance is the contractors with no tax to pay
5) The new owner of the Ltd then liquidates the company and withdraws the 1MM - Because he bought it for 1MM there is no profit
Would love to hear serious answers to why this would not work rather than "Its too complicated and you wouldnt understand it"
Have a great Wed!
Sure it'll work. But why? What's the point?See You Next TuesdayComment
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Originally posted by jamesbrown View Post
Er. I think you can simplify all this nonsense to moving overseas and taking a dividend or capital distribution at a favorable (e.g., 0% tax) rate.
But you'd better not return to the UK within 5 years or you'll be taxable in the UK on the full amount as though you'd taken a dividend or capital distribution in the year of return.
That is why I went to the trouble of highlighting the steps that would need to be doneComment
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