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Where Taxpayers and Advisers Meet

CGT mitigation of overseas share sale

Ryk
Posts:1
Joined:Tue May 11, 2021 12:22 pm
CGT mitigation of overseas share sale

Postby Ryk » Tue May 11, 2021 12:54 pm

Interested to establish if one can do an 'in specie' transfer of shares held in my name to a partner. The shares (part of my remuneration package) were granted by and are held by a Dutch company. The Dutch company is not able to transfer ownership of some of the shares to another person.

My question is: If a Dutch notary was to document an 'in specie' transfer prior to the share sale would this, upon sale of the shares, be a valid transfer acceptable by HMRC? The benefit of course is that then both my self and my partner could claim against our respective CGT allowance.

AGoodman
Posts:1223
Joined:Fri May 16, 2014 3:47 pm

Re: CGT mitigation of overseas share sale

Postby AGoodman » Wed May 12, 2021 11:02 am

Can you explain what you mean by "in specie". In England it usually means transferred in its original form (i.e. rather than being sold and the proceeds transferred) but you are saying that isn't possible.

someone
Posts:478
Joined:Mon Feb 13, 2017 10:09 am

Re: CGT mitigation of overseas share sale

Postby someone » Wed May 12, 2021 12:00 pm

I think that's what they mean: transfer the shares to the spouse "in-specie" and then the spouse sells them. But if you cannot transfer to the spouse then I don't see how that can work "on paper" even if the "in-specie" spouse ownership is only for a few minutes before sale.

Would a transfer of beneficial interest work for CGT purposes? Owner writes a letter to spouse saying they're transferring beneficial interest to them and holding the shares on trust. Spouse then says "please sell them for me and give me the money".

Feels like it ought to work and avoids any issues of who the legal owner of the shares needs to be.

AGoodman
Posts:1223
Joined:Fri May 16, 2014 3:47 pm

Re: CGT mitigation of overseas share sale

Postby AGoodman » Thu May 13, 2021 11:19 am

Yes, I think a declaration of trust may well work. At one time it was common to use a company to own French property and the company would declare itself a nominee for the owners - this was recognised here but ignored by French law.

You would want to check the particular restrictions in the company articles to make sure you are not in breach of something that could cost you the shares - and you should check the Dutch tax position as well


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