Tax on shares issued at nominal value in private company

[Chaddesley]

Company is owned 50/50 by two directors each holding 50 £1 shares. They want to transfer 6% ownership in total split between the mother and uncle of director 1 so that the new ownership will be:

Director 1: 47%
Director 2: 47%
Mother of D1: 3%
Uncle of D1: 3%

The company has value and so if they transfer their own shareholdings then I assume there will be a CGT charge for them on the market value of the shares.

If the company issues 44 new £1 shares to each of them and 6 new £1 shares to each of the two new shareholders then I assume there will be no CGT implications (as there is no disposal) but will there be income tax implications:

1. For the new shares issued to the directors (I would have thought not as their shareholding has actually been diluted - in which case is it worth doing this as a rights issue?)

2. For D1 on the shares issued to his mother / uncle considering they are a related party.

Any thoughts much appreciated.

[pawncob]

Your suggestion results in a gift to the new shareholders, since it's at the instigation of the existing shareholders (and Directors).
You can't avoid the gift position, so why not just a simple gift to the M/U? Hold over relief might also be available.
http://www.hmrc.gov.uk/rewrite/example/annex.htm