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