Joe Brough considers tax implications to be aware of when gifting shares in the family company.
Gifting shares in the family company is a common way of passing ownership and control on to the next generation. As any number of shares can be transferred, a gift of shares can be a useful tool to facilitate the current shareholders gradually taking a step back from the day-to-day running of the company.
When gifting shares, a client’s focus is often to minimise the immediate tax liability. This usually means any capital gains tax (CGT) liability and the extent to which gift relief is available. However, income tax and inheritance tax (IHT) consequences should also be considered.
This article assumes that the shares referred to are unquoted shares in the donor’s personal trading company, they have been held for at least two years, and the recipient is an individual who is not a spouse or
