Shares / CGT / Hold Over Relief & Business Sale !

Quite a complicated one , I own 50% shares on a LTD Company. The other 50% shareholder has "Gifted"

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Quite a complicated one , I own 50% shares on a LTD Company. The other 50% shareholder (Mr A) has "Gifted" 19% of his shares to his Girlfriend. (Not spouse or Civil Partner) 
Consideration has been marked as Zero, no gain or loss on the transaction. Stock Transfer form not sent to HMRC for stamping as there was no exchange of funds. 
Mr A is insisting dividends for both himself and Girlfriend are paid to his bank account, so essentially still receiving dividends to the value of 50%  He is also not willing for his girlfriend to have a "Voting Voice" as essentially he is maintaining his 50% position. He wont even share her email address so she can contacted. However on SA Tax he is only declaring 31% of Dividend shares. 
No doubt his will claim Hold Over relief to avoid CGT. 
Business is 2 months away from sale completion and once the business asset (book of business) has been sold the company will be voluntarily liquidated, thus making the shares worthless - Questions: 
Is the Hold Over Relief called in at the rate the shares had value on gaining them or disposing them?
Will the 19% Shareholder legally have to receive 19% of the Sale asset? 
Will the 19% Shareholder have to pay 20% CGT on the income of sale ?
Sale of business is circa £1.6M , The shares had a nominal value at incorperation, 0.01p Now they must have a value? 
Any insight into the above would be really valuable. 
 

 

Replies (10)

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By David Ex
23rd Jan 2024 15:58

You need an accountant.

https://find.icaew.com/

Other professional bodies are available.

https://www.accountingweb.co.uk/any-answers/how-to-use-any-answers

“If you intend to plan a course of action based on what you read in here, you should instead be taking professional advice.”

“They are not here to provide free accounting advice.”

PS You also need a solicitor.

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By Ruddles
23rd Jan 2024 15:58

If it's "complicated" then it is deserving of professional, ie paid-for, advice - including that of legal advisers.

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By FactChecker
23rd Jan 2024 17:54

If "Business is 2 months away from sale completion" and "Sale of business is circa £1.6M", then you must have appointed both Accountants and Lawyers.

If you have, why not ask them (they'll have access to everything needed)?
If you haven't, then heaven help you across a wider set of issues!

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Replying to FactChecker:
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By JJB1982
23rd Jan 2024 19:02

Yes we do, however they act for the company, not individual shareholders and shareholder relationships have broken down.
I do have my own Solicitor but trying to avoid expensive litigation

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Replying to JJB1982:
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By Tax Dragon
23rd Jan 2024 19:33

Why is someone who has fallen out with you showing you their tax returns?

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Replying to JJB1982:
By Ruddles
23rd Jan 2024 19:41

If £1.6m is on the table, trying to cut corners by seeking advice from unknown internet forum members who know practically nothing of the circumstances is utter folly.

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By Tax Dragon
23rd Jan 2024 18:32

Not sure what you want here. Are you looking for https://www.gov.uk/report-tax-fraud?

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RLI
By lionofludesch
23rd Jan 2024 18:57

He hasn't really given her the shares, has he?

He'll have a big wake up call on the way.

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Replying to lionofludesch:
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By JJB1982
23rd Jan 2024 19:03

Yes he has.
These are my thoughts - that he hasn't thought this through. But then I worry it's me that's missing something !

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Replying to lionofludesch:
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By FactChecker
23rd Jan 2024 19:07

What GF heard: "What's mine is yours, and what is yours is mine".
What BF heard as he said it: "What's yours is mine and what's mine is my own".

William Shakespeare vs James Joyce ... the outcome could be interesting.

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