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The shares in a trading company are owned by an interest in possession trust, which was established to take advantage of retirement relief. Holdover relief will be available on a gift of shares from the trust to the shareholder’s son
Around 90% of the shares in a trading company are held by an interest in possession trust that was set up by our client in 1999 to take advantage of capital gains tax retirement relief.
The trust is no longer required and our client wishes to gift the shares back to himself. Part of the shareholding will then be gifted to his son who is a director and 10% shareholder in the company. Holdover relief will be claimed to avoid capital gains tax on both gifts.
Part of the reason for the gift from the father is to enable a larger dividend to be paid to his son. The son currently draws a high salary and this has substantial National Insurance contributions costs.
Our queries are as follows.
- Do readers see any problems or pitfalls in obtaining holdover relief on the gifts out of the trust...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
