New client. Company had a share capital reduction 6 years ago to produce positive reserves. It seems that no initial payments were made to shareholders and we expect that we'll find out that all subsequent payments to shareholders were treated as dividends on their tax returns in subsequent years. The question is, if the company is sold now what is the base cost of the remaining shares?
Cearly there was a "disposal" of shares when the capital reduction took place but there was no consideration. So is there a capital loss which is carried forward (there have been no gains since then) or do we treat the initial full amount of the share capital subscribed for as the base cost? (Net result should be the same whichever is correct)
Or have we missed something!?
Any help would be most appreciated!