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Transferring shares to a new shareholder

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Hello forum,

I have a basic question regarding transfer of shares from an existing shareholder to a new shareholder within a private limited company.

On transfer of shares for consideration, does this mean that there will be a chargeable gain on the limited company and capital gains tax for the individual selling the shares?

Thank you for help in advance!

 

 

 

 

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19th Jul 2019 10:28

Unless you are qualified to act on this matter, I think you should decline.

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19th Jul 2019 10:40

Maybe.

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By 356B
to JCresswellTax
19th Jul 2019 11:08

JCresswellTax wrote:

Maybe.

Are you just being provocative?

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to 356B
19th Jul 2019 14:01

Maybe.

Thanks (2)
19th Jul 2019 10:59

raj1234 wrote:

On transfer of shares for consideration, does this mean that there will be a chargeable gain on the limited company and capital gains tax for the individual selling the shares?

 

No gain on the limited company. It isn't a party to the transaction.

Yes - maybe CGT for the vendor, subject to what the numbers are.

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19th Jul 2019 12:10

What's the limited company sold ?

I would suggest nothing.

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to lionofludesch
19th Jul 2019 12:55

That's not the only time that gains are chargeable on companies, of course (hence JCresswell's comment). But I think you're right- the OP is asking only about the gain on the shares.

It's amazing how often that question gets asked. Don't people know what companies are?

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to Tax Dragon
19th Jul 2019 15:10

Tax Dragon wrote:

Don't people know what companies are?

Piggy banks to keep money from the bloody government, to be used as the director’s personal funds?

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By GR
19th Jul 2019 15:18

Unfortunately you have provided very little information in your question. Consequently it is very difficult to help you. 5 important details that you should have let us know are: (1) are the person who is getting rid of the shares connected to the person who is receiving the shares, (2) what is the base cost of the shares, (3) how much are the shares sold/transferred for, (4) does the person who is disposing of the shares have any capital losses brought forward from earlier tax years, and (5) tax status of the person getting rid of the shares, e.g. UK resident and domicile? You cannot reasonably expect people to help you if you ask a very brief question without providing the necessary details.

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19th Jul 2019 20:33

any disposal is a taxable event for the shareholder. the seller will be subject to capital gains tax on any gain based on the market value less the cost . the problem is usually establishing the MV. there are allowances which may be used to offset against any gains. the purchasing shareholder will probably have to pay stamp duty at .5 % of purchase price tho if gifted again reliefs are available

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to carnmores
19th Jul 2019 20:55

Why do you think that market relief is necessarily relevant?

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to Wilson Philips
20th Jul 2019 08:14

Wilson Philips wrote:

Why do you think that market relief is necessarily relevant?

MV is relevant for ERS.

But that a different tax that no-one ever seems to remember.

Except JCresswellTax. Maybe.

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