This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Tarnsfer Ltd Company shares to Holding company

samlock
Posts:5
Joined:Fri Aug 09, 2019 8:51 am
Tarnsfer Ltd Company shares to Holding company

Postby samlock » Wed Mar 13, 2024 2:31 pm

Hi. I have 25% shares in Company A (Limited company) and 20% in company B. I would like to transfer these into a holding company so that dividends are paid to the holding company and I am only taxed on dividends paid out from the holding company and also for funding future companies from the holding company.

is the above correct in that the holding company structure will work and hwo do i go abut doing this if I already have a holding company 100% owned by me (new and not holding any assets right now).

AGoodman
Posts:1743
Joined:Fri May 16, 2014 3:47 pm

Re: Tarnsfer Ltd Company shares to Holding company

Postby AGoodman » Thu Mar 14, 2024 5:43 pm

Your starting point is that it would be a disposal of the shares in companies A and B for CGT purposes. Any net gain would be subject to CGT

I'm not sure you can avoid this. There is special provision for a share for share exchange under s.135 TCGA but that only works where HoldCo acquires at least 25% of the new subsidiary and it must be for bona fide commercial reasons and not tax avoidance(s.135(6) and s.137).

There may also be problems with the anti-avoidance provisions known as "transactions in securities".

Basically, this is not straightforward and you need proper advice from an expert.


Return to “Company Taxation”