Postby AGoodman » Wed Dec 02, 2020 11:30 am
Probably makes sense on the purchase and sale but bear in mind that if the price has risen before the sale:
- a sale at an undervalue will be a chargeable transfer for IHT by the shareholders - this should be absorbed by your annual exemption and nil rate band so no actual tax to pay. It could be an issue if you then died within 7 years because it would reduce the nil rate band available to set against other assets in your estate.
- there must be a good chance/risk that the undervalue could be treated as a deemed distribution or benefit to you (as shareholder or director) so subject to income tax in your hands.
Others may well known the details and level of risk for point 2 better than me.