DISPOSING OF SHARES

Family company with husband and wife holding 48% shareholding each. Turnover £1.6million, Balance Sheet £1.2 million of which 87% is held in cash.

They want the cash out of the company, possibly selling some or or of their shares, at lowest possible tax cost without necessarily loosing management control.

Company buy back of some of the shares would not attract ER relief and connected parties rules apply.  Due to the cash held there is doubt over whether HMRC would challenge it being a trading company ?

They have two adult children, one of whom is employed in the business but is unable to run it herself.  The other child's husband is employed in the business but likely to ruin it if left to his own devices.

We are currently looking at all and any options for the client to choose one.  The husband and wife are in their 70's and not in great health.  We would be tempted to leave things as they are and hopefully get IHT relief on business asset but they want cash out and the cash held could cloud the 'business asset'

Any ideas?