Reply to: Changing Share issue

[ASB]

No it's the other way around. You wouldn't have to sign such a form for a spouse as they are automatically exempt from CGT. You can apply for holdover relief in various scenarios, one of which is where the asset in question is a business asset and the proceeds are less than market value.

I see, could be useful to remember if I ever become unmarried

[rootsnall]

The advice I remember being given is to just shut your Co down and start a new one with whatever share setup you now require.

[THEPUMA]

No it's the other way around. You wouldn't have to sign such a form for a spouse as they are automatically exempt from CGT. You can apply for holdover relief in various scenarios, one of which is where the asset in question is a business asset and the proceeds are less than market value.

[ASB]

You should also both sign a capital gains tax holdover relief claim form in order to avoid the capital gains tax problem to which ASB refers. Email me if you want me to send you a blank form.

Isn't that only appropriate for spousal transfers?

"partner" was mentioned so that might stymie the relief.

[THEPUMA]

You should also both sign a capital gains tax holdover relief claim form in order to avoid the capital gains tax problem to which ASB refers. Email me if you want me to send you a blank form.

[PAG]

Yeah 40 to my partner, however I dont want to pay dividends to her, just me, she is ok with that, she is alsio the company sec.

get her to sign form 88(2). and 288(b).

[oraclesmith]

The valuation would be something akin to what they would fetch in open market for a slice of your company. Obviously it's very difficult to do with a tiny company which depends on one person's skills, which is why I gave up doing it and resorted to the settlement route to pay divi's.

[ASB]

surely you can transfer the shares to anyone you want without financial gain.

Not really no.

It would still count as a disposal for CGT reasons. So if they were sold back for say a tenner to a connected party then there is a disposal for the valuation rather than the consideration. What the valuation is in these circumstances is questionable, but a percentage of the retained funds is probably a decent starting point. Thus if the company had a large bank account it could potentially give rise to a CGT charge on the seller.

[PAG]

surely you can transfer the shares to anyone you want without financial gain.

[oraclesmith]

Or can she not just resign from being a director form 288B?

She can resign from an office but she is still a shareholder. There is a difference. Give me strength !

[PAG]

Or can she not just resign from being a director form 288B?

[oraclesmith]

Get professional advice about divi waivers. They can be a flag to the Revenue. My accountant advised against divi waivers as there are a number of circumstances where they can be used to avoid tax.

If your partner is not contributing to the company, then you could do as I have done which is to issue divi's to both of you, but go with the S660A premise that there IS a settlement - with you as settlor. This means you get taxed on your divi AND her divi, which providing they don't push you above the UEL, means there is no more tax to pay.

It means that if you wanted to pay, say £10k in divi's, you would pay yourself £6k of them and her £4k, but for taxation purposes they will be counted as if the whole £10k went to you. This is how the Revenue would like it to be re. S660A, so they can't really argue against it. Before you do anything, see your accountant.

She still retains 40% ownership of the company though, so I presume this is OK, and that your reason for adjusting share issue is about divi's.

[ASB]

Isnt there a case about to go to court soon?

It's the IR appeal to the lords I think.

However, I suspect you are OK. The IR argument goes about effort. But if your partner is not getting the divvi and it is you that puts in the effort then they don't really have this argument.

If, however, by some coincidence your partner waiving the dividend results in the combined tax take going down then the IR might like to argue that it was in fact a settlement from them to you and they should be taxed on it. No idea what argument they'd try given their argument in the Arctic case but I'm sure they could dream up something.

[Diestl]

Isnt there a case about to go to court soon?

[ASB]

Yeah 40 to my partner, however I dont want to pay dividends to her, just me, she is ok with that, she is alsio the company sec.

Get her to sign a dividend waiver. Should be able to find a template on the net. Form your own opinion about any potential S660 issues though.