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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 7052
Experience:  FCCA FCMA CGMA ACIS
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I have shares in a USA company awaiting a market quote. They

Customer Question

I have shares in a USA company awaiting a market quote.
They are in my name but I need advice about transferring them to a limited company which I & my wife own.I am the key investor in the form of directors loans of about £53000This company trades largely in US$ and I am opening a $ account through my business bank, RBS.I want advice as to the pros & cons of the company owning these shares & especially the tax implications both the plus & minusses
Submitted: 9 days ago.
Category: Tax
Expert:  bigduckontax replied 9 days ago.

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

There is no Capital Gains Tax (CGT) liability on transfer as Incorporation Relief applies which postpones CGT until you ultimately dispose of your shares. Any profits made by the company will be subject to Corporation Tax (CT). Any repayment of Directors' Loans would be outside the scope of UK taxation unless interest is involved.

Customer: replied 9 days ago.
Would it not be better to have a capital gain personally now before the shares have real value? If the money for the shares subsequently sold is in a $ account what are tax implications in UK for the company? If the director's loans are re-paid without interest then there is no tax? And can I as a director borrow from the company tax free?
Expert:  bigduckontax replied 9 days ago.

Companies are not subject to the CGT regime, all such transactions pass through the trading account of the company and are exposed to CT.

You have, as an individual, a non cumulative Annual Exempt Amount (AEA), currently 12K, to offset any gains whilst a company has no such concession. It may therefore be more advantageous tax wise for you to personally dispose.

You can as a director borrow from your company, but any such borrowings must be repaid within 9 months of the end of the company's accounting period to avoid horrendous tax consequences.