I wanted to check my understanding on something with you.
There's a company with two 50% shareholders, A and B (friends, not relatives) who are also the only two directors. A is going to stop working at the company, sell shares to B and resign as director.
A believes their 50% of shares to be worth £5000, and therefore wants to sell the shares at that amount to B, which B accepts. They have confirmed that this is the same value for which they would sell these shares to a third party.
I believe that A and B are not connected persons, but in any case, the transfer is taxed on an arm's length basis. Am I correct on that point?
In this case, because A believes the shares to be worth £5k, this is at arms length value, and it would be up to HMRC to challenge the valuation if they saw fit.
Am I missing anything here?