Entrepreneurs' Relief - another question

Hi Everyone,

I have a client (60 ish) who's about to start divorce proceedings. He wants to gift his company (of which he owns 99% of the shares) to his children (one of whom owns the other 1%) prior to doing so, and get Entrepreneurs' Relief.  The main reason for this is to be able to get at the fairly large cash reserves held by the company which he cannot do at present without higher rate tax on dividends.

Not sure whether he can do this, though - if he gifts the shares this will perforce include the cash, which the children will have to give back to him, thereby incurring their own IHT problems, albeit hopefully academic as they're only around 30.  And in any event, will they be able to get at the cash any more easily than the client ?

He wants to remain as MD, however, and receive a salary of maybe £60k, biting the NI bullet in doing so as he won't be able to have dividends. As far as I can see, becoming MD won't prevent his getting ER.

Other option might be to just wind up the company, claim ER on the assets, and start another company.

Any comments, anyone ?

Thanks