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An entrepreneurial client has built up an unquoted company. He now owns 100% of the share capital, having acquired other holdings from elderly relatives. Those transfers were subject to holdover elections, but if shares are transferred to his wife, will a gain crystalise?
Our client is a successful entrepreneur who has built up an unquoted family company. His elderly relatives gifted the shares in the unquoted company to him in 2009 and the gain on the deemed disposal was held over under TCGA 1992 s 165. The gain was very substantial.
The client thus owns 100% of the issued ordinary shares and voting rights in an unquoted company. He now wishes to transfer some of his shareholding to his wife who is employed by the business.
Our query is whether the transfer between husband and wife will crystallise the held-over gain. Furthermore if the wife holds more than 5% of the shares for more than 12 months will she be entitled to use up part of her £10m lifetime capital gains tax entrepreneurs’ relief limit on a subsequent disposal of those shares?
We look forward to replies.
Query 18...
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