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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4996
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am a UK resident working and paying my taxes in the UK. My

Resolved Question:

I am a UK resident working and paying my taxes in the UK. My brother and sister run a ltd company in Cyprus where the three of us are shareholders but I have nothing much to do with this company. They have recently sold an asset and in order to save on Defence tax they would like to transfer all the shares to me. They have been advised that as I am a non resident in Cyprus transferring all shares to me would help them avoid this 20% tax. All other taxes such as Corporation Tax and Income tax etc are all being paid by the Company. If I agree to accept these shares what implications (if any) will I have. I will not be a director - simply a 99% shareholder.
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.
As a shareholder of a company your tax liabilities to UK tax authorities
are as follows:
You would pay income tax on any dividends paid to you as a shareholder from this company and/or any other investments;
Any gains made from sale of shares would be chargeable to capital gains tax subject to annual exempt amount (this tax year the allowance is £11,000.
I hope this is helpful and answers your question.
If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 3 years ago.

Thank you for your quick reply. Just to clarify, I will not receive dividends or make any gain, this will be a simple transfer from the two them to me. Could there be any implications to me personally if I agree to this? I assume not as I am not a director simply a shareholder. Thank You!

Expert:  taxadvisor.uk replied 3 years ago.
Thank you for your reply.
If they are transferring shares to you, I presume there is some consideration for those shares. How are you paying them for your increased shareholding? You are in fact increasing your stake in the company.
As a shareholder I have already told you of your tax obligations. I don't foresee any implications from UK end. You should check your position in relation to Cyprus rules and taxation.
I hope this is helpful
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 3 years ago.
I thank you for accepting my answer.

Best wishes.