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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3840
Experience:  Solicitors 2 years plus PQE
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Company or Tax LawyerI am currently going through a

Customer Question

Hi Company or Tax LawyerI am currently going through a complex divorce, actually my estranged wife has been refusing divorce proceedings, despite it being inevitable as she is the one who left.She is a GP and is a Director of her Business with 2 others. She has repeatedly refused to bring her accounts, businessand others.However the company is on Company House.I accidentally discovered last July from her accountant I had shares in her company and that they had been transferred to the other partner. This was before she left.On Company House , I apprently held 10% of shares in her company since 2008. I did not know about this. I suspect this was for tax purposes. I did not receive any dividends from the company. She received dividends regularly, but I did not realise I was made a shareholder.In 2013 my shares dropped to 7% again I was not aware and did not sign any documents to confirm a share transfer.In 2015 , when I spoke to her accountant he asked if I was aware that I had held shares in the company I said, no. I was then informed my shares had been transferred to the another partner.As I have mentioned I did not know I had these. I never signed a share transfer agreement and have not received any dividends from the company since I had these shares in 2009.Is this illegal? This is a PLC but run by public monies as it is a GP practice. It is likely my dividends were shared out between the other partners.What should I do?Many thanks
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. Were your shares actually transferred to another partner, or were more shares issued having the net effect of diluting you from 10% to 7%? Kind regards AJ
Customer: replied 2 years ago.
No they were transferred to another partner. The other 2 director transferred some of their shares to him as well.
I did not even know I had shares
Customer: replied 2 years ago.
I was informed in July I had no more shares and they had all been transferred. It was purely a chance conversation with their company accountant
Expert:  Alex J. replied 2 years ago.
Hi, Thank you. The transfer wont be valid, you cannot transfer shares to another party without your signature on a stock transfer form (called a CON40G) - the onyl other way would be if there was a contractual right to force you transfer the shares in a shareholders agreement for example. What do you actually want to achieve, do you want value for the shares?
Customer: replied 2 years ago.
2 things
1. I need to know if this is legal or fraud as the only way this could of been done is forged signature? My concern this a PLC run but funded by NHS monies
2. Since 2008 I did not receive any dividends, so where did this money go? and i did not even know I had shares in theit company in the first first place? Was this to reduce tax liability for my wife?
Expert:  Alex J. replied 2 years ago.
Thank you.1. Yes if they have forged your signature, it is fraud - if they have just transferred the shares without following proper procedure it will just be a civil matter.2.Has the company been regularly declaring dividends?
Customer: replied 2 years ago.
Yes dividends twice a year.
Was I given shares for tax advantages, as her spouse?
Customer: replied 2 years ago.
How should I proceed as well? Is this a case for inland revenue or a lawyer?
Expert:  Alex J. replied 2 years ago.
Thank you - potentially yes the reason why you had the shares is so your wife pays less tax- it stands to reason if she has fewer shares she is entitled to fewer dividends and therefore pays less tax overall. What would be concerning is if she was taking your dividends without paying tax on them and incurring a tax liability in your name.The way to proceed is to send a letter to the company initially and ask to explain what has happened to your shares - and make clear your never sanctioned a transfer of the shares or signed a stock transfer form - if the explanation is unsatisfactory you have some extreme options under the Companies Act 2006 - s.994 -protection of minority shareholders from unfair prejudice - you could consider suing to receive value for your shares.You could report this matter to HMRC if there is a case of tax evasion, but I would be certain this is the case. If your wife has to deal with a tax investigation this may distract her from actually reaching a settlement with you.Kind regards AJ
Customer: replied 2 years ago.
Thank you I shall proceed with the investigation as i have asked for answers and not received a single response, from the company and their accountant. It's been over 6 months now.
Expert:  Alex J. replied 2 years ago.
Hi, Thank you. If they wont response to your request, you have to suggest that court action may a possibility. Can this not form part of the divorce proceedings as well? If you can prove you owned the shares then the divorce courts could have greater power to force your wife to explain what happened to them. Kind regards AJ
Customer: replied 2 years ago.
Hi. Yes, I can prove the shares as they are on Company House. However, this goes beyond me as it is about 3 doctors and NHS monies. Possible illegal share transfers but also tax evasion for 7 years. I think this is beyond divorce matters and is not something I wish to leverage on, but enable due diligence from HMRC.
Expert:  Alex J. replied 2 years ago.
Hi, Thank you. There is nothing to stop you sending evidence to HMRC of tax evasion but I would make sure you have all the evidence you can possible garner before sending it. You are entitled to report tax evasion but I would try and avoid it coming across as speculative in any way - so it does not make your divorce proceeding more difficult. Otherwise proceed with the unfair prejudice claim and see if you can full value for your shares. Kind regards AJ
Customer: replied 2 years ago.
Ok, thank you. What evidence do I need. All the accounts are there onlone. I have never received a divividend in 7 years , that is clear. What other evidence should I gather?
Expert:  Alex J. replied 2 years ago.
Hi, Thank you. Perhaps the best way to do is make an inquiry of HMRC to check you have no tax liability in relation to this company. Explain that shares were placed into your name without consent, which were entitled to dividends and you have no idea what happened to the dividends. You can send the statutory accounts to HMRC - if HMRC investigates the company or your wife they will have to then co operate. If you have an accountant that works for your, I would engage the accountant to send the inquiry and the evidence.
Customer: replied 2 years ago.
Thank you. I shall do so. Greatly appreciated
Expert:  Alex J. replied 2 years ago.
I wish you the best of luck. If you require any assistance or have any follow up information please do not hesitate to contact me. In the mean time I would be most grateful if you would rate my answer. Thank you kind regards AJ
Expert:  Alex J. replied 1 year ago.
Hi, Can I assist you any further? Any feedback is gratefully received? Kind regards AJ