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Disassociated disposals?
KEY POINTS
- A father intends to pass shares to his son at the time of an associated disposal.
- Could the possibility of a subsequent share transfer to the son be deemed a ‘share purchase arrangement’?
- FA 2015 introduced the 5% disposal test.
- The measure to counter avoidance using ‘share purchase arrangements’ was introduced by FA 2016.
- HMRC agrees that the ‘share purchase arrangements’ are not intended to include genuine commercial succession arrangements.
- Remember that the 5% disposal test relates to the total shares in the company rather than the individual’s shareholding.
I was surprised that two presumably unconnected respondents to a Readers’ Forum question on associated disposals had each concluded that the circumstances described by the questioner could be construed as involving a ‘share purchase arrangement’...
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