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Transfer of shares between directors

Tax implications for transfer of shares between directors at nominal value

Hi, my first post here on this website. 

In a private company there are three directors who hold the same amount of shares. After incorporation, if one of the directors decides to gift some of their shares to another, would there be tax implications? I heard somewhere that as the directors are employees, there would be benefit tax implications. The amount should be less than the capital gains limit allowance. 

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22nd Nov 2017 18:47

Welcome ponyojpn!

This is a forum for accounting professionals and not for people who need accounting or tax advice but would rather not pay for it.

Good quality advice will pay for itself many times over.

You will find someone in your area here:

https://find.icaew.com/

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to Accountant A
22nd Nov 2017 20:30

Thanks. I guess when we get stuff sorted out for the company we will definitely get advice from professionals. It was just a question to get our initial ideas together.

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to ponyojpn
23rd Nov 2017 09:21

ponyojpn wrote:

Thanks. I guess when we get stuff sorted out for the company we will definitely get advice from professionals. It was just a question to get our initial ideas together.

Will you be providing whatever it is you do to other businesses for free until they "get stuff sorted out"? If not, why not?

I am also curious as to why, if you are only just starting out, you are already changing the shareholdings. Perhaps you shouldn't even be a company at all. Good advice is about answering the questions you didn't even think because you don't know what you are doing.

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By Matrix
22nd Nov 2017 19:24

They would need to register an employee share scheme. If tax falls due then this may need to be put through payroll.

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to Matrix
22nd Nov 2017 20:32

Thanks for your advice. Would we have to do that even if the company is going to be very small? I thought we could transfer them personally and paying capital gains tax is necessary.

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By Matrix
to ponyojpn
22nd Nov 2017 21:04

Capital gains tax is for transferor, PAYE would be for transferee.

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23rd Nov 2017 10:04

There's insufficient information to give a complete overview. There may be capital gains implications, transactions in securities implications, inheritance tax implications, etc.

You need that professional advice before doing anything rather than waiting and hoping for the best after the event.

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