Pre-Liquidation Spouse Share Transfer & BADR

Advice regarding liquidation of solvent company eligible for BADR and pre-liquidation share transfer

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I am a director/shareholder of an agricultural services company along with my wife (company secretary) - we both each hold 50% of the shares for more than two years. 
I have been running another company in the same industry for a few years with several other directors/shareholders. My wife has no connection to this other company. I would like to close my own/wifes company since I would like to focus on the other (larger) business. I understand that in order to be eligible for BADR I would not be permitted to continue in the same industry. Is a solution to that specific issue to transfer my shares to my wife before the liquidation and BADR claim? In such a case she would not be carrying on in the same or similar industry. My question is would that be an allowable approach? I will be taking paid-for advice but I wanted to understand more about viability before seeking advice. Thanks for any help.

Replies (13)

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By Leywood
23rd Aug 2023 12:36

HFEC wrote:

I will be taking paid-for advice but I wanted to understand more about viability before seeking advice.

Any client of mine taking advice from a forum full of strangers who dont have the full facts would soon find themselves being an ex client.

Have some respect. Get paid for advice first. If you want a 2nd opinion, pay for that too.

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Stepurhan
By stepurhan
23rd Aug 2023 13:22

Even on the limited information available, there are clear problems with your plan. You should be able to spot some of them if you think a bit about what you know already.

There may be ways to achieve something close to what you are trying to achieve. No-one would be able to advise you on them without far more information.

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By David Ex
23rd Aug 2023 13:44

HFEC wrote:

I will be taking paid-for advice but I wanted to understand more about viability before seeking advice. Thanks for any help.

For what it’s worth, I think that’s worse than just asking for free advice. Basically you’re asking people here to educate you for free to inform discussions with someone you’re going to pay. I’m my view, that’s very disrespectful.

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By Ruddles
23rd Aug 2023 16:27

HFEC wrote:
I understand that in order to be eligible for BADR I would not be permitted to continue in the same industry.

Your understanding is wrong. Cross my palm with silver and I'll tell you why.
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Replying to Ruddles:
paddle steamer
By DJKL
23rd Aug 2023 16:59

Just never charge 30 pieces, 29 or 31.

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By Tax Dragon
23rd Aug 2023 19:42

I've still not got the hang of this Awebbing malarkey.

The question appears to be "is it worth my taking advice about this?" and imho the answer is "yes, in your situation you should take paid advice".

But I can tell from the reactions of other Awebbers, who haven't given that answer, that I am supposed to be offended by (and apparently pick on someone for asking) that question.

Why?

Why is this question offensive, but ones about cross border VAT (to pick just one of many subjects that comes up repeatedly - asked on behalf of companies that really ought to have accountants from whom they could and should seek advice - and one which nevertheless generally receives fairly detailed replies) aren't?

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Replying to Tax Dragon:
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By The Dullard
23rd Aug 2023 21:04

I'm not offended. Just 6 posts and it's been a good thread. I enjoy displays of ignorance.

As honest Abe is alleged to have once said, "It's better to remain silent and be thought a fool than to speak and remove all doubt."

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Replying to The Dullard:
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By Hugo Fair
23rd Aug 2023 23:48

I'm more concerned for OP's wife.
"Pre-Liquidation Spouse" ... do you think she know the planned end-game?

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Replying to Hugo Fair:
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By The Dullard
24th Aug 2023 01:00

A man with a blender should always be considered dangerous. IMO.

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Replying to Tax Dragon:
Stepurhan
By stepurhan
24th Aug 2023 10:50

Tax Dragon wrote:

The question appears to be "is it worth my taking advice about this?" and imho the answer is "yes, in your situation you should take paid advice".

To be precise, they are not asking is it worth taking advice, they are asking if it is viable.

It would be possible of course to simply say yes it is or no it isn't. But they could simply ask their own adviser that and more than likely get the yes/no answer without charge. But the OP doesn't want a yes/no answer, they want to "understand more" about the viability. They want more detailed advice on the scheme, advice which a paid-for adviser may well consider chargeable.

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By AndyC555
24th Aug 2023 08:16

I think it was Roy Jenkins who once answered a multi-question request for information with the response; "the answers to your questions are 'yes', 'yes' and 'no'. But not necessarily in that order"

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By taxdigital
24th Aug 2023 08:20

DIYers’ posts are generally a source of much needed entertainment!

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Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
24th Aug 2023 10:09

I'm unable to give tax advice and suspect your accountant will be able to answer your queries but you might get what you need from these links:

https://www.gov.uk/business-asset-disposal-relief

https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm36305

I'd be happy to provide you with a second quote for an MVL if/when you are ready.

More info here:

https://youtu.be/svRwgIsFWR8?si=FwJ4dbO1mvE3OSlu

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