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Where Taxpayers and Advisers Meet

Capital gains tax on Voting shares vs Non Voting shares

somghosh
Posts:5
Joined:Wed Sep 01, 2010 2:37 pm
Capital gains tax on Voting shares vs Non Voting shares

Postby somghosh » Mon Mar 29, 2021 8:59 pm

I am a business owner, and currently own 100% of the common ordinary shares of the company

I am looking to bring in an investor, who will put in funds and will own 50% of the company, but only 25% of voting shares

So if we sell the business, I get 50% of sale proceeds, other party gets 50% of sale proceeds.
However, I am retaining overall control by keeping 75% of the voting shares

How does HMRC look into this from capital gains point of view? Am I correct to say that I will only be liable to pay capital gains on my share of proceeds and the fact that I own disproportionately more voting shares does not matter?

AGoodman
Posts:1211
Joined:Fri May 16, 2014 3:47 pm

Re: Capital gains tax on Voting shares vs Non Voting shares

Postby AGoodman » Tue Mar 30, 2021 11:13 am

Correct.

On a sale, you would just take away your investment from your (personal) proceeds of sale to calculate the gain.

The fact you have control would be factored into the valuation if you made a gift (CGT/IHT) or for inheritance tax generally but only because having control makes your shares potentially more valuable.


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