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15 November 2011
Concern about IHT implications
I am concerned about the inheritance tax implications of Kevin Slevin’s example Bright Ideas in his article Tax engineering.
Just to recap Clive’s parents each own 35% of the shares in their company Bright Ideas Ltd while Clive owns the other 30%.
Clive is not an officer or employee of the company and makes an outright gift of the shares to his parents and holds over the gain under TCGA 1992 s 165. His parents will claim entrepreneurs’ relief on the subsequent sale of the shares.
What should not be forgotten here is that Clive would be making a potentially exempt transfer of some £3m that as at the date of the gift would benefit from business property relief.
However should Clive die within seven years...
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