Business sale part for cash part for shares | AccountingWEB

Business sale part for cash part for shares

H&W each own 50% of ltd co.  Accepted deal for £80k cash & 5% shares in unquoted purchasing co between them plus jobs with purchasing co for both at a decent salary.

Entrepreneurs relief will be available as they meet the conditions, but what about business asset rollover relief on the portion related to the new shares?  My initial thought is not as they will each only have 2.5% of the newco, but then I think that they're not getting cash so how can they be expected to cough up CGT?

Also there has been no formal valuation on purchaser so how to value the 5% total shares in that company?  Clients, without my input!, have 'valued' the 5% at approx £100k and verbally accepted the deal.

So my questions are

1.  How do I determine the value of the shares they are accepting, does it need a formal valuation?

2.  Would business asset rollover relief be available on the shares part of the consideration?

3.  They are asking about splitting the gain over two tax years to get two annual CGT exempt amounts however as I understand it, it is the point at which the contract becomes unconditional that is the tax point and therefore unless they have two separate contracts a month apart, this will not work.  Surely there must be anti-avoidance measures to stop this, and HMRC would argue that it was in fact one sale.

I realise I need to get in contact with my tax helpline about this as it is an area I've not dealt with recently but your guidance is very much appreciated. 

Thank you in advance for any input.

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