Company share repurchase from deceased Estate

[pjclar02]

Hello there

Company A is owned equally by three shareholders. Shareholder B died intestate and the shares are currently going through the process of administration (if that is the correct term) to be passed to Shareholder B's children

Shareholder C and D would like the company to repurchase Shareholder B's shares so that they can revert to 50:50 owners. If this is accepted by the administrator - what would be the tax position, assumign a valuation of £200,000 for the shares.

If probate values the shares at £200k, it has been suggested that once probate is granted, the shares can be repurchased by the company for £200k and there is no liability to tax for the Estate because the deemed acquisition cost if £200k and the proceeds are £200k.

Is this correct?

The deceased shareholder had held the shares for over five years, but does the clock for capital gains treatment start again once the Estate enters administration?

In which case would the £200k then be treated as an income distribution?

Any thoughts welcomed!