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Hello, I'm Keith and happy to help you with your question.
Dribbling out assets is a well known method of tax avoidance and perfectly legal. However gifts create a Potentially Exempt Transfer (PET) in your estate for Inheritance Tax (IT) purposes. PETs run off on a taper over seven years and in the event of your demise are the first to suffer IT. If your estate cannot meet the IT it cascades down to the beneficiaries for immediate payment.
However if stocks and shares are involved the PET position remains. If you are selling off part of the company, providing the Articles permit such sales, then each disposal would generate a CGT liability depending on the gain based on the current market and acquisition values. You have an Annual Exempt Allowance AEA) of 11K so providing your disposal's gains do not breach this there would be no CGT liability. If you go over that then you may be able to apply Entrepreneur's Relief (ER), but remember you must be in at the ground floor to be entitled. ER reduces the tax on any gain to 10%. Keep within the AEA and you have no problem anyway.
I do hope I have thrown some light on your conundrum.
Thanks for that. It is helpful. I remain a little unclear re what CGT would be chargeable on if I gift Ltd Co shares to my children - is it the difference in value between what I "bought" the shares for (a share of the £1.1K share capital - £1 a share) and the current "share price" (my share of the current company value of £237K - approx. £215 a share, a massive share price appreciation) or is it only my share of the £38K building appreciation over what we paid to build it?
Thanks. That's what I thought. I possibly will gift out 10-12% of shares annually for a few years on this basis.