Share purchase on death

Share purchase on death

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I am looking to set up a share purchase arrangement on death - in a similar vein to a Partnership automatic accrual agreement.

On the death of either shareholder the agreement would give put and call options to buy the shares at a nominal price - say original par value. The actual value will be considerably more than this. The clients spouses will be well looked after through a death in service arrangement.

Does anyone see any problem in this? There should be no CGT issues on death and assuming BPR no IHT either - although my one concern is that if the widow is selling at below market value could that give rise to a PET on the basis of loss to her estate? But if she is contractually obliged to sell at that price then is there actually any loss?

Thoughts welcome

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