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Our client, Mr A, was a full-time working director of a company and owned 10% of the issued share capital. On the advice of his accountant, he transferred part of his shareholding (about 10% of his holding, i.e. 1% of the total) to his wife — the necessary share transfer form having been completed. On the same day, his remaining holding and his wife's shares were sold for in excess of £1 million.
Our client Mr A was a full-time working director of a company and owned 10% of the issued share capital. On the advice of his accountant he transferred part of his shareholding (about 10% of his holding i.e. 1% of the total) to his wife — the necessary share transfer form having been completed. On the same day his remaining holding and his wife's shares were sold for in excess of £1 million.
The client's individual tax returns were completed including the capital gains pages and filed with HMRC. The Inspector has now opened an inquiry into the returns and suggested that the transfer of the shares to the wife prior to the sale should be disregarded and all of the capital gain should be assessed on the husband. In case it is relevant the company was unlisted and the wife was...
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