Classy shares

I met a potential new client Mr X the day after I had been to a very good lecture given by John Whiting on the subject of the new general anti-abuse rule (GAAR).

Mr X had been made redundant but had subsequently been offered a contract (in publishing) on a consultancy basis. He had obviously taken some advice and had incorporated a company with the intention of making his “non-working” spouse both a director and shareholder.

However he had gone one step further and the new company issued six £1 shares all of different classes (A to F) but otherwise ranking “pari passu”.

Mr X took the A share Mrs X took the B share and the remaining four were given to a family friend. The friend then promptly transferred these shares to each of Mr and Mrs X’s four minor children. The...