close company

[david]

Hello,

I have recently purchased a majority shareholding in an unquoted company, and have been told that this is a 'close company'. Does anyone know what this means? what are the tax implications of this?
thanks

[flora]

A close company is one which is controlled by five or fewer participators/shareholders, or any number of participators/shareholders if they are directors. The rules with regards to the taxation of close companies can be somewhat harsher than those for non-close companies but not massively. It depends really on the situation. The accountant dealing with the company's books will be able to give you more info.

[webmaster]

Hi David,

I don't know if you have seen an article on 'close companies' in the TaxationWeb's Articles section. To read the article, go to:
http://www.taxationweb.co.uk/articles/?articleID=8

[steve@nunn-hayward.c]

Hello David,

I certainly cannot add to the article refered to as to the definition and direct implications for you.

The only one I would add is that the holder of a close company share may potentially obtain higher Business Property relief for inheritance tax,than if they held a quoted share.

Regards
Steve Cook, ATII
Nunn Hayward, Chartered Accountants
01753 888211