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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15915
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I own 18 (18%) ordinary shares in a private family company

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I own 18 (18%) ordinary shares in a private family company acquired upon incorporation 10 years ago at a cost of £18
I inherited 15 (15%) ordinary shares in the same company upon the death of my husband
15 months ago at a probate value of £100,000
I now wish to transfer 12 ordinary shares to my son who is over 18
I understand that a 'disposal ' calculation needs to be undertaken to arrive at sale proceeds
My question relates to the base cost.
Are the shares pooled ie 32 shares at a base cost of £100,018 or are there other rules relating to unquoted shares
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.

Hi.

The cost of the holding is £100,018 as you say and the shares are pooled in the same way as quoted sahres are. As you have 33 shares, the cost for CGT purposes for each one is £3,030.85.

As you are giving away shares to your son, the deemed disposal proceeds will be the value of 12 shares at the time of the gift. The gift will also be a potentially exempt transfer for Inheritance Tax purposes, the value of which will stay in your estate for seven years.

You may be able to make a claim for business asset holdover relief. The qualifying criteria are set out in HS295 here.

I hope this helps but let me know if you have any further questions.

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