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Advise on Share Disposal

Any ideas?

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Hi there,

We have a client who has 2 director/shareholders - brothers each owning 50%. One brother wants to sell to the other brother to get out.

The company is cash rich and has a lot in the bank.

I have suggested that in the first instance the company should be valued to determine the worth of the shares. The sale would be a personal sale i.e. from brother 1 to brother 2 and stamp duty would be payable on the shares and capital gains for the other brother.

The brother purchasing would not have the funds personally to pay for the shares so does anyone have a recommendation for utilising the cash in the company. Would it be possible/ efficient to: 1 B1 sells 2 B2 and is owed the money. B2 then declares a dividend each month/ in a lump sum to then extract the funds from the company to pay off B1?

Anyone any thoughts or other ideas? I have a meeting in a few weeks.

thanks in advance

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By In a Daze
11th Sep 2019 13:06

I would get the company to buy back the shares. Obviously both brothers would need to agree.

You would also need clearance from HMRC however, i doubt you will have any problems.

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Replying to In a Daze:
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By Accountant A
11th Sep 2019 15:58

Quote:

i doubt you will have any problems.

As it never occurred to him in the first place, I beg to differ!

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