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Where Taxpayers and Advisers Meet

Transferring shares

Sam15
Posts:2
Joined:Wed Aug 06, 2008 3:08 pm
Transferring shares

Postby Sam15 » Thu Nov 23, 2017 9:43 pm

My co director is leaving the company. He currently own 50% of the shares. We've tentatively agreed that I will gain a % of his shares when the company hits certain profit milestones thereby reducing his shareholding over several years but rewarding me.

Two questions:
1. Does this make sense as a mechanism to reward me?
2. Are there tax implications for either party?

Any feedback appreciated!

greybags1
Posts:47
Joined:Tue Jan 31, 2017 10:41 am
Location:NE Scotland

Re: Transferring shares

Postby greybags1 » Fri Nov 24, 2017 4:29 pm

In response to your points:
1. It's one way to reward you. Has use of an EMI scheme been discussed?
2. Yes. Outgoing director will be subject to capital gains tax. You will be subject to income tax as per the employment related securities legislation. Depending on other factors NIC may/may not be payable.


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