I have a trading Company valued at say £750,000. Mum (75) owns 37.5% Son 50% and employee 12.5%. Son had inherited 37.5% from Dads estate who died in 2005, the shares were then valued at £232,500 in Dads estate.
We now want to pass 17.5% to the employee in the most tax efficent manner to ringhim to 30%.
I guess we are caught by Employment related securities legislation no matter how it is done and employee will be subject to income tax on MV(not readily convertible)
Because of the ERS tax I expect we may as well utilise Sons high base cost because of share identification rules rather than Mum paying 12K CGT on her gift. But then we want to transfer Mums shares to Son as she is 75 wants to give him control of the company. Mums transfer to Son would not be ERS under the family and personal relationships but I expect she would have to hold over the gain.
Just wondering if there is anything I have missed to make it more efficent and does the company get the D1 deduction for the market value of the shares irrespective of who gifts to the employee.