Reply to: Share buy back

[NotAllThere]

Just reading how share buy backs, used by the like of Apple, can be more tax efficient than dividends. That being the case, how long will it be before some chancer dreams up a myco ltd scheme attempting to use the same mechanism?

Three days, it seems.

[WTFH]

What is MM? In Roman numerals that's 2000.

Mutual Masterba Moderation

[Lance]

What is MM? In Roman numerals that's 2000.

Moistened Minge

[jamesbrown]

What is MM? In Roman numerals that's 2000.

Much Mince.

[ladymuck]

What is MM? In Roman numerals that's 2000.

[northernladuk]

That is why I went to the trouble of highlighting the steps that would need to be done

Five steps to offload a million quid. Load of trouble that was.

[WTFH]

Ok. I hadn't though of anything so complex.

I do wonder why the Swiss resident wouldn't just MVL the company though. He gets the cash directly that way.

I suspect he doesn't MVL it because it is probably providing a nice tax-reduced income to a few friends and family, and company cars all round.

Or, more likely, it doesn't exist and he's fantasising about what he would do if he had ever successfully contracted in his life

[Lance]

The same reason that a bloke buys a pile of bricks for X amount - Or that the buyer believes there is inherent value in the business or IP associated with previous contracts

Believe it or not you can spend your cash on whatever you want and its only a problem if the person spent it has been duped - If someone wants to buy a classic car for ten times its original price what are we know - Or a painting for £XX

jamesbrown has got your number

[Lance]

Imagine the bloke is an elderly relative.
They buy the shares in the company, then set up multiple directors/shareholders with one or two love value shares - maybe even including swindlers in Switzerland. Then when uncle Ernie pops his clogs, the family inherit the company and pay less tax on that.

It's not about ethics, or societal values, it's all about the hard cash. There's nothing else in a hollow life.

Ok. I hadn't though of anything so complex.

I do wonder why the Swiss resident wouldn't just MVL the company though. He gets the cash directly that way.

[WTFH]

so a bloke with a million pound is gong to buy a company worth a million ponds, for a million pounds, and make no money out of it.
Sure it'll work. But why? What's the point?

Imagine the bloke is an elderly relative.
They buy the shares in the company, then set up multiple directors/shareholders with one or two love value shares - maybe even including swindlers in Switzerland. Then when uncle Ernie pops his clogs, the family inherit the company and pay less tax on that.

It's not about ethics, or societal values, it's all about the hard cash. There's nothing else in a hollow life.

[NowPermOutsideUK]

so a bloke with a million pound is gong to buy a company worth a million ponds, for a million pounds, and make no money out of it.
Sure it'll work. But why? What's the point?

The same reason that a bloke buys a pile of bricks for X amount - Or that the buyer believes there is inherent value in the business or IP associated with previous contracts

Believe it or not you can spend your cash on whatever you want and its only a problem if the person spent it has been duped - If someone wants to buy a classic car for ten times its original price what are we know - Or a painting for £XX

[NowPermOutsideUK]

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.

You are correct about the five year rule - Note that in switzerland dividends are properly taxed as income whereas CGT are not

That is why I went to the trouble of highlighting the steps that would need to be done

[Lance]

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!

so a bloke with a million pound is gong to buy a company worth a million ponds, for a million pounds, and make no money out of it.
Sure it'll work. But why? What's the point?

[jamesbrown]

I have actually thought about that for a while

Oh dear. You really are a massive cretin.

[jamesbrown]

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!

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.