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Consequences for income tax when a new shareholder acquires nil or partly paid shares
KEY POINTS
- The Companies Act 2006 general prohibition on partly paid shares.
- If shares are only partly paid could a charge arise under CTA 2009 s 455?
- The implications of the decision in RKW Limited v HMRC.
- ITEPA 2003 Part 7A and a partly paid transfer from another shareholder.
- Partly paid shares can be a useful incentive in encouraging employee share ownership.
Where it is agreed that an individual should become a shareholder in the company but does not immediately have the cash to make the investment one solution is to issue nil or partly paid shares and schedule payments. In other words the individual becomes a shareholder now and is committed to pay up later.
To do this is not quite as simple as...
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