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Three brothers own the shares in a trading company which trades from premises owned personally. They wish to dispose of the property and plan to each gift a 5% shareholding to their wife to enable the sale to be treated as an associated disposal
Three brothers own a company equally. The company trades from premises that they also own equally but no rent has been charged. The brothers are considering an option agreement with a developer for the disposal of the site because the business can be relocated to other premises owned personally.
The plan is for the brothers to each gift a 5% shareholding in the company to their spouses the day before (or on the day) the developer exercises its “call” option.
The worry is that the premises will not be treated as an “associated disposal” for capital gains tax entrepreneurs’ relief purposes because the vendors will not be in control of both disposals (which should be caused by the same event).
Readers should be familiar with the concept that both disposals should be part and parcel of withdrawing from participation in the business (whatever this means).
Several commentators...
