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Readers’ forum: Would transaction be taxed as income?

© Copyright LexisNexis 2024. All rights reserved.

08 April 2024

Issue: 4931 / Categories: Forum & Feedback , Income Tax

Transactions in securities

Our client has the following structure in place. The trading subsidiary (Tradeco) is owned 100% by a holding company (Holdco) which in turn is owned by 11 shareholders. These are four individuals and seven companies as follows – A B C D A Ltd (owned 100% by A) B Ltd (owned 100% by B) C Ltd (owned 100% by C) D Ltd (owned 100% by D) E Ltd F Ltd and G Ltd. These are all close companies and no single shareholder (or combined with their companies) owns more than 25% of Holdco.

There is a shareholders’ agreement (SA) in place which values the company at £5m (regardless of reserves in either Tradeco or Holdco). The reserves currently in the company (Holdco + Tradeco) are c£2m.

Person A (PA) is looking to retire immediately and wants to sell his...

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Readers’ forum: Would transaction be taxed as income?

© Copyright LexisNexis 2024. All rights reserved.

08 April 2024

Transactions in securities

Our client has the following structure in place. The trading subsidiary (Tradeco) is owned 100% by a holding company (Holdco) which in turn is owned by 11 shareholders. These are four individuals and seven companies as follows – A B C D A Ltd (owned 100% by A) B Ltd (owned 100% by B) C Ltd (owned 100% by C) D Ltd (owned 100% by D) E Ltd F Ltd and G Ltd. These are all close companies and no single shareholder (or combined with their companies) owns more than 25% of Holdco.

There is a shareholders’ agreement (SA) in place which values the company at £5m (regardless of reserves in either Tradeco or Holdco). The reserves currently in the company (Holdco + Tradeco) are c£2m.

Person A (PA) is looking to retire immediately and wants to sell his...

Only subscribers may read the full article

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this item in full.

Issue:

4931

Categories: Forum & Feedback [1] , Income Tax [2]

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