Readers’ forum: Amending articles of association

A client has an existing investment company holding property and listed investments which is largely funded by a directors’ loan from the shareholders but does have some unrealised gains. The company has standard articles and husband and wife own the shares. Minds have now turned to IHT planning and involving the next generation in owning shares in the company.

What tax aspects should we consider in deciding whether to amend the articles/shareholdings of the existing company or to get the assets out and start again with a bespoke family investment company.

I have in mind that altering the rights attaching to close company shares is considered a chargeable lifetime transfer (CLT) for IHT. I also thought that we could raise debt in the existing company to finance repayment of the existing DLA which could then be used to fund the new FIC. I’d be grateful for readers’ thoughts....