Tax position on Share Distribution

A Client of mine has a number of shareholders, one of which owned 200 shares (out of 1040 issued) and was no longer involved in the business. After nearly 10 years they managed to buy these shares back for £8000, which was paid by the Company.

They want to give these shares to the sole Director who currently owns 20 shares.

The share's have a nominal value of £1.00 each.

My understanding is that this gift of shares would be the equivalent of a cash payment of "net" £8000 and PAYE and NI would be payable on a grossed up figure.

Does anyone have a solution that doesn't involve this expensive route? We did look at cancelling and then reissuing new shares but again, my understanding is that there would be PAYE/NI liable on the difference between purchase and real value so no benifit there.

Thanks in advance