Tax on share acquisition

[Cautious]

An ex colleague of mine has approached me to join his company as a director. Part of the deal would include my acquiring shares in the company at no cost to me (the company is privately held). My question is about the personal tax implications of this- would I incur a tax liability as soon as I acquired the shares (i.e. are they treated as income), or only upon the sales of the shares?

Many thx

[AvocadoK]

Yes, income tax is payable where you acquire shares for less than their 'market value' (being the amount that the shares would fetch if sold by a willing seller to a willing buyer). You should get advice on the value. It might be better if the company granted share options to you under EMI rules (subject to various conditions being met). There is no tax on grant, and you could defer exercising the options until a sale. Worth seeking professional advice, as the tax liabilities can be large.
AK

[Cautious]

Many thx Avocado K