Shareholding Transfer

[rick4]

I am looking at transferring my 50% ownership of a limited company to my partner (that owns 50% already). My partner is proposing to pay a nominal shareholding value for my 50% as well as my director loan to the company. Are there any tax implications for him or me with this proposed transaction ? Should this transaction be between two individuals as opposed to between the limited company and me ?

 

[MOB]

If the 'nominal' purchase amount is due to the fact that this is all the company is worth, there is no problem. (Bear in mind, however, that if there is value in the company, you will be deemed to have sold your share at 50% of that value, even if you accept a nominal sum.)

Regarding the directors' loans, there is likewise no problem: what simply happens is:

1. Other Director makes further loan to company (no problem there)
2. Company, now flush with cash, repays your loan (no problem there either)

 

[rick4]

Thanks MOB - re the Director Loans - does the Company pay me in point 1 & 2 or just 2 ?

 

[MOB]

Makes no difference, as long as the co. only repays what it owes you. I was assuming that the co. would need money from the other director to be able to pay you. See comments about about value of co.