The old man

For many years my client ran a successful family business in a limited company but retired about ten years ago. He still owns 25% of the company shares and his daughter owns the other 75%. His daughter's accountant has advised me that the father has agreed in principle to transfer half of his shareholding to her. The 'old man' appears to be happy to gift the shares but it seems that the daughter's accountant has suggested that the company might declare a dividend of which my client would receive £50 000 and she would waive her entitlement. I am a little concerned at this suggestion.

The shares are standing at a substantial gain and I should be grateful for advice as to the potential tax liabilities and/or reliefs that might relate to such a transactions.

Query 17 181 — Daddy's Helper

Reply by New Road:

What...