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Director A owns 16% of the shares of a trading company. The fortunes of the company have declined and she intends to resign and to gift shares to the other shareholders and directors. Director A would like to hold over any chargeable gain
Director A owns about 16% of the shares of a trading company which she subscribed for at par for about £24 000.
Because of the declining fortunes of the company A wants to resign as a director and to gift her shares to the other two shareholders/directors and hold over any gain under TCGA 1992 s 165. The shares are likely to be worth more than par because another majority shareholder is about to receive above par in a share buyback.
We are concerned that a gift of the shares to the other shareholders/directors could be caught by the disguised remuneration rules introduced by FA 2011 Sch 2 and wondered whether this risk might be lessened if the company were to buy back A’s shares for £1.
If A’s shares were bought back at market value and A did not meet the conditions of CTA 2010...
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