Dividends received by a small company

[spike418]

Good morning.

I have just taken on a new client who has a stack of shares in the same UK plc.

He and his wife have no other income using up their personal allowances.

The shareholdings could be sold at a loss due to the current value.

I am considering them selling the shares to a newco of which they would be the only directors.
The sale would obviously be at market value and create a significant loan from the directors which could be drawn down at will free of charge.
Dividends could be taken from the new coy up to the personal allowance and 0% band of £5000.
The dividends received by newco would not be subject to CT.
Obviously there would be a potential annual loss of CGT exemption each year.
The loss on sale would be a "clogged loss".

Subject to that, am I missing anything?

[SteLacca]

You are also talking about retained profits in newco, though, which will be subject to CGT at the full rate on eventual liquidation (investment company and so no ER available). Effectively gambling on future CGT rates.

Also consider of SDLT will be payable by newco on acquisition.