Going inside IR35 mid tax year - can I reassign company share %?

[Major Hassle]

If the gift is an absolute gift to a spouse (specifically a spouse who qualifies for the spousal exemption, which requires cohabitation and possibly some other conditions) and consists of ordinary shares, I’m struggling a little bit to see the problem, even though it’s clearly in order to reduce tax.

Isn’t this what Arctic Systems was all about?

I am sure lots of people will be mulling over this kind of option so if anyone can clearly state what rules it might fall foul of, it would be most useful.

Nothing legally to prevent I think, but certainly to qualify for ER you need to have hekheld the shares for 12 months

[webberg]

You need to think about this situation from a commercial and non tax perspective.

Broadly anything you do which is solely or mainly for tax purposes (with the objective of achieving a tax reduction that Parliament did not intend) will be subject to any number of TAAR's (targeted anti abuse rules) and in some cases perhaps even GAAR.

There are rules about your disposing of an asset (your shares or right over the shares) which does not go to an exempt person (a spouse). IN general you will be treated in such cases as having disposed at market value and to have perhaps made a gain that may be taxable.

There are also rules about converting income to capital which can be tricky as they catch situations in which the tax benefit is accidental.

So if you are making the transactions just to obtain a tax benefit, be prepared for enquiry and ultimately a tax reversal of any benefit claimed.

Go and talk to an adviser.