Readers’ forum: Transferring shares

We have been asked to advise the controlling shareholder in a small trading private limited company. He wants to know about transferring shares to his grandchildren either out of his own holding or by way of alphabet shares. Obviously this would be to enable them to take advantage of their own tax allowances. They do not have any other income so this will for example help with school fees.

This is a complicated issue bringing in capital gains tax inheritance tax and income tax not to mention trusts.

It has been suggested for example that the shares could be put into a bare trust for minor grandchildren so as to keep control of the holding. The dividends could then be mandated direct to the beneficiaries so avoiding the need for tax complications by way of simplifying the administration for the trustees....