Share sale via MBO including transfer of co. car

How do I tax the share sale?

Didn't find your answer?

I've had a client that has sold their company in a MBO.

The proceeds were cash, deferred cash, and their company cars were transferred to them.  The total consideration was a round figure.

Usually i'd tax the lot as CGT, but i'm wondering in this case if the CGT proceeds are the cash/deferred cash, and the transfer of the company car should be dealt with on the P11D (Assets transferred)?

Has anyone else got any ideas as to which tax may take precedence? 

Thanks

Jonathan.

Replies (5)

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paddle steamer
By DJKL
29th Jun 2021 14:59

Who purchased the shares, the company or A N Other?

Whose car was it?

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Replying to DJKL:
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By JonathanD
29th Jun 2021 15:05

It was a sale to a third party. the company car was sold as part of the transaction to the shareholdoer/director who already drove the car as their company car.

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paddle steamer
By DJKL
29th Jun 2021 23:29

My point is if individual A buys with his own money the shares in Co Ltd why does Co Ltd itself part with a car it owns, Co Ltd is not buying any shares in itself so why would it pay over any of its assets to the purchaser of its shares?

I am struggling to see how the transfer of the car can be part of the consideration re the purchase of the shares, it just seems to be something negotiated at that time but cannot be part of any price A pays for said shares as A does not ever own the car, Co Ltd owns it.

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By paul.benny
29th Jun 2021 15:04

And did vendor resign as director and employee on sale? If so, harder to argue transfer of car is employment-related.

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By JonathanD
29th Jun 2021 16:40

They continue to work in the business on a consultancy basis, so that may be an issue.
Thanks

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