To obtain capital treatment for CGT the purchase must be for the benefit of the trade. SP2/82 refers to examples of an unwilling shareholder such as an outside shareholder who provided equity finance and now wishes to withdraw, or a controlling shareholder who is retiring as a director and wished to make way for new management.
A small private company has a shareholder base comprising 6 directors and their wives with 80% of the shares held equally between them and one corporate shareholder with 20%. Four of the directors wish to retire and exit along with their wives, to leave the two younger directors and wives as shareholders along with the corporate shareholder to take the company forwards and introduce other employees as shareholders.
Is this likely to meet the trade benefit test for all the exiting shareholders including the wives on the basis older shareholder directors are retiring to make way for new management to secure the future of the business?
Why does SP2/82 refer to an “outside” shareholder or a “controlling” shareholder? The four directors and their wives hold a combined 53%.
- Home
-
Tax News
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice and Methods
- Professionals in Practice & Industry
- General
- TaxationWeb
-
Tax Articles
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings and Investments, Pensions and Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice & Methods
- Professionals in Practice & Industry
- General
- Tax Tips
-
Tax Forum
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations and Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practices & Methods
- Professionals in Practice & Industry
- General
- Tax Jobs
- Get in Touch