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09 January 2023
Categories:
Forum & Feedback
Transactions in securities
One of my clients Mr C has a 50% shareholding in A Ltd. The other 50% is held by an unconnected individual. A ltd has a £200 000 cash balance and no debts or creditors. Mr C also owns 100% of the shares in C Ltd his personal service company.
Mr C wants to extract cash from A Ltd but the other shareholder is unwilling to sell the company. Mr C has been talking to another adviser who has suggested that he transfers his 50% shareholding in A Ltd on a ‘nil consideration basis’. I assume that this means a share for share exchange under which C Ltd will issue new shares to Mr C in exchange for the acquisition of shares in A Ltd. The plan is then for A Ltd to dividend £100 000 of cash to C Ltd. Ultimately C Ltd would be...
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