Shares in private company and transfers

jatindersangha

Hi,

I have shares in a private company which may shortly be bought out, and I am expecting my shares to be exchanged for cash.

If I keep all of the shares in my name, then I will be subject to 28% tax on the gains. My wife doesn't work and is a non taxpayer.

Am I right in assuming that I can transfer some of the shares to my wife so that we both benefit from the CGT 10K allowance and then also she benefits from the 18% CGT rate. Obviously, depending on the final value of the shares, we may well be subject to the 28% CGT rate as well.

So, my question is, is my assumption (above) correct?

Also, as I know that there is a strong possibility of the company being sold in the next few months - then does this affect the transfer of my shares to my wife ie. could this be classed as insider-dealing or something?

Thanks,
--Jatinder

anselld

I think spouse transfer is fine. No different to if you wanted to sell for any other reason.

chrismac1

Insider dealing only applies to companies listed on a stockmarket and even then - wink wink! - there are lots of ways round it. That is why around 80% to 90% of the time before a company announces either good or bad news, the shares have been moving up or down for a few days previously.

jatindersangha

Thanks for the replies so far.

As an aside - how is HMRC/Inland Revenue informed of such a company sale and how do they track that CGT payments are due etc?

Thanks,
--Jatinder

John_Pierpoint

Will the buyer offer you some sort of negotiable loan stock? Then you could transfer half or more of that to your wife and then she and you could dribble out sales enough to realise a £10,600 CGT profit over a few years tax free?

If you are already self assessing and you keep disposals down to less than 10,600 X 4 and profits less than 10,600. that is all you need to say. If you are not already in the self assessment net, and don't owe any CGT then HMRC don't need to know.

Were you getting and reporting dividends from the private company?

thenudeone

jatindersangha wrote: »

Thanks for the replies so far.

As an aside - how is HMRC/Inland Revenue informed of such a company sale and how do they track that CGT payments are due etc?

Thanks,
--Jatinder

Well the new owners of the shares will be paying stamp duty to HMRC, for a start!

Secondly, you will probably have an obligation to declare it if it's above a certain size or capital gains level, and if you don't they'll hammer you!