Hello
Hope you guys can help please..
A company has share capital of £244.70 with share value at £0.10 each
Shares have been divided as follows:
Person A = 2210 Ordinary Shares
Person B = 175 B Ordinary Shares
Person C = 62 C Ordinary Shares
Person C is a client that I action Self Assessments for.
She received 62 shares at £0.10 each = £6.20.
My question is: Does she have to pay tax on the shares? Obviosuly the value is under £50 and therefoe HMRC do not consider them as needing to be taxed as 'negligebale'.
OR, is it that I should be looking at the Company shes works for value and applying the perecentage that she owns
I.e as she own 62 of 2447 shares = 2.534% of the Company should tax be payable at 2.534% of the Company's value?
The Shares were issues on 23rd March 2020 and therefore within the 19/20 tax year.
Clearly, shareholdings and tax treatment not my speciality so any guidance would be very much appreciated.
Many thanks
Replies (19)
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Were they founder shares?
No, a redistribution
https://www.gov.uk/government/publications/employee-shares-and-securitie...
many thanks
When you say "value" do you mean actual value or nominal value?
That was all the information I was given, alas. If was 'Nominal' what are the implications?
Well, you need to go back and ask for more information. If it was 'Nominal' then it is of no relevance to the issue. You need to establish what the shares were actually worth, among other things. If, as you concede, you are out of your depth with such matters you need to refer it so someone with the appropriate skillset. And by that, I do not mean posting a query to A Web.
Thank you for the reprimand.
It wasn't intended to be a reprimand. In the best interests of your client, you really should pass this on to someone that knows what they are doing - there is a whole raft of issues that needs to be considered, with penalties for getting it wrong. You have already conceded that this is not an area that you have much experience in. There is absolutely no shame in acknowledging one's limitations and equally one should not take offence at being advised to take the appropriate course of action.
There's an apt Dirty Harry saying (that I have in here quoted often, but sometimes wrongly attributed to Josey Wales).
Josey Wales is a great film, IMHO.
JW is a great film.
DH overrated.
It was a Dirty Harry saying, but not in the film of the same name ;¬)
Appreciate your time and your advice.
I have the company's accountant that my client works for to assist as well so just wanted a better knowledge of the situation before involving him.
I have that, now, as in the basics, and I appreciate your words, as I say.
The Q on A Web was, however, valid as it has helped with my understanding.
Thanks all.
Ask them for the value of the shares and whether the gift was payrolled. They would have made an employment related securities submission with this information so ask for the amounts applicable to your client.
have done exactly that - cheers.
Why obviously? These appear to be par values and probably don't reflect the value of the company.
Were the shares given out or did your client and the others subscribe for them? If they paid for the shares, how was the price set? Buying shares at market value is unlikely to be taxable.
Yes, not obviously! I meant if they were the actual share value but, as you say, Company must be worth more that £244.70 !
This is where I'm a bit lost..
The shares were gifted so no money was paid by my client/ the employee.
All credit to the op for coming back and engaging with the replies and even more so for honesty in acknowledging the limits of their knowledge. If only more questioners were like that.
Appreciate that, mate. Thank you.