I have a client who has 3 shareholders at 33.33 percent each and one of the shareholders wants to increase the shareholding to 40 percent. The company has 3 shares of £1 each.
I would like to advise for the company to increase the share capital from 3 shares to 1000 shares and one of the shareholder to get more shares. The other two shareholders have no problems with this. All the shares will be sold at nominal value and not at a premium. I dont think this will have any CGT or other tax implications. Is there a way this can work if two of the shareholders want to be financially compensated for the dilution of the shares?
The second scenario is for the company to issue more issues to all shareholders equally so then one of the shareholder can buy the shares from other shareholders. Obviously this will have CGT implications but they can buy and sell shares only to their CGT allowance. The process may drag but they will not have to pay CGT.
The third scenario is for the company to issue more issues to all shareholders equally and then the company can buy the shares from two of the shareholders. What are the tax implications for the company and to the shareholders?
Your help will be greatly appreciated