Transferring shares held by busniness to director

[Yell_M3]

I've got shares (Shell, BP, etc) held by my company in a corporate trading account. It's become a bit of a bind with regulations.

If I were to transfer those shares to a personal account could I treat it as a dividend (using the value at time of transfer)?

[UpTheIron]

I can't see it being that straightforward... the transfer is really a sale by the company so you need to account for the appropriate tax treatment of that sale - i.e. CGT.

[Eric Mc]

Yep - company sells or transfers assets it currently owns to a director of the company. If there is a gain on the disposal, the company will have a Capital Gains Tax liability arising on the gain.

If the shares are transferred for no consideration to the director, there is very likely a taxable Benefit in Kind arising based on the Market Value of the shares.

Finally, there would be disclosure requirements that would need to be addressed in both the formal company annual accounts and in the Corporation Tax return covering that financial year end.

[Yell_M3]

Thanks, thought it might be a little more complicated. I'm guessing the BIK would be dependent on personal tax rate? And if so would the value of the shares count towards your annual salary (like a dividend)?

[Eric Mc]

Yell_M3 said:

Thanks, thought it might be a little more complicated. I'm guessing the BIK would be dependent on personal tax rate? And if so would the value of the shares count towards your annual salary (like a dividend)?

Dividends are NEVER counted as additional salary. They are counted as additional INCOME but they have different tax rules and tax rates compared to salary - and they never suffer NI.

A Benefit in Kind IS counted as if it was additional salary although the NI rules are not as onerous as on normal salary.