This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Reverse share swap

pjclar02
Posts:163
Joined:Wed Aug 06, 2008 3:43 pm
Reverse share swap

Postby pjclar02 » Wed Nov 07, 2018 4:38 pm

Mr A owns 25% of the shares in Company A, with the remainder of the 75% shares being held by a Family Trust.

Company A is a dormant holding company, which owns 100% of company B, a trading company.

Mr A would like to somehow transfer 20% of his overall holding in the group to being 20% of the trading subsidiary only, making Company B owned 20% by Mr A and 80% by Company A. This is for succession planning purposes for the trading business.

Mr A is a director of both companies, as such we cannot simply issue new shares in Company B or gift shares from Company A to Mr A.

Is there a reverse share swap, or similar, mechanism through which this transaction can be effected without adverse tax consequences?

Many thanks

Return to “Capital Gains Tax, CGT”