Member Since: 23rd Jun 2021
14th Dec 2021
Thanks for linking that article. I have read it before and on a refresh read, I'm struggling to see where my approach is different to what is being recommended in the article.
The article states that HMRC regard the disposal taking place at the point of beneficial interest being transferred which would be at the date the contract has been entered into and the benefit of ownership of the shares has been transferred (following the transfer, the shares hold no benefit to the holder as no rights).
The article goes on to say that as beneficial interest is lost on all shares, the connection tests at s1042 and s1062 are not in point which is the stumbling point I'm at, in that HMRC are now saying, 'they are in point' and that I don't meet them. As I understand it, if they were in point, it would be pretty difficult to do any multiple completion deal as it would require you to 'divest' yourself of all but 30% of the shares meaning deals would have to be very 'tranche 1 heavy'.
I was wondering if I'd done something wrong around the reclassification of the ordinary shares to shares with no cap/div/voting rights. The article states that the problem of s1062 (2) (c) can be resolved by the conversion of the 'non completed' element into shares of a separate class of non-voting shares which is what I've suggested in my application so don't forsee an issue here either.
I'm wondering if its a misunderstanding from the caseworker's perspective and whether I should simply refer them onto ICAEW TR 745 but as there's no right of appeal here, I'm worried if there is something fundamental I'm missing.
14th Dec 2021
Yes this is precisely the reason, business doesn't have the funds to do so in a one-er. Agree that the retained shares are essentially worthless apart from that company is contractually obligated to purchase them at the pre-determined price.
Apologies for not getting back to you both quick enough, its not because I don't appreciate or value the input. I was off sat/sun/mon and looking after my baby and didn't have time to check the forum.
10th Dec 2021
That's a fair point. I suppose I perhaps meant to say it goes against established practice in which HMRC regard the transaction as being effected for CGT purposes when the beneficial interest in the shares passes as opposed to the legal ownership.
Noted on my opinion being wrong regarding definition of ordinary capital. I did recall the 0% fixed div argument but couldn't recall the outcome.
It sounds like I need to take a step back and think this all through with a clearer head and do a bit more research.
Thanks for your response.
5th Nov 2021
Its all a bit of a joke. We were regularly quoted 6 months to deal with various matters which I found ridiculous. The tipping point for me was when we were advised 9 months to deal with something (can't remember what it was). I ended up writing a letter to my MP venting my frustrations and providing some recommendations for HMRC. Off the top of my head it was something along the lines of:
-more call centre staff as well as a higher calibre of call centre staff
-more autonomy for minor stuff to be resolved by phone without the need for letters
-a commitment to post being dealt with within a reasonable time frame. I suggested 2 months which I still find ridiculous but I'd take it at this point.
The response I received...."I've passed your comments onto HMRC"....Felt like such a waste.
Anyways, I'm preaching to the choir here.