The MD of our company is looking at retiring and is considering selling 70% shares to the other director who also holds the remaining 30% shares.
Lets assume that the MD and other director have agreed a price for the 70% shares of £400k.
It would be preferable for the company to facilitate purchasing the shares (i.e. use profits from the company to pay for the shares). The MD would look to take c. £150k from the bank as an initial 'payment'. This would leave more than enough working capital so wouldn't impact the business.
My questions are...
1) If the above is do-able, by what means can the MD take the £150k out of the bank to the best tax advantage and
2) What would be the most tax advantageous way (for MD and Comapny/ Director) for paying the remaining £250k to the MD. Bearing in mind this money would come from either profits or directors salary etc.
I assume the remaining £250k could be paid over a number of years (ideally 3-5) but would want the option to pay sooner, if funds / profits allowed.
I have some knowledge of capital gains tax and entrepreneurs relief but not enough knowledge to know how this can be applied to the above scenario.
Any help / advice would be greatly appreciated.