Tax Efficient Ways of Acquiring Shareholding

CapedCrusader

Hi folks,

Take this hypothetical scenario.

A person is a director of and has a shareholding in Company A. Company A has some cash in the bank.

The same person wants to acquire a shareholding in Company B and needs to make an investment of €X.

If the investment in Company B is made via personal cash, this will come from Company A via salary. Thus, I imagine this would be the least efficient way to do it. I guess another way is for company A to acquire a shareholding in company B. Does this work?

If company A was being wound-down, could proceeds be used to acquire shareholding in company B tax free? Is this an efficient way to do it?

Are there other options?

Thanks folks.

Gaillimh1976

Should work fine, but depends why company A is being wound down

e.g. if it was going bust, company B would become an asset which the liquidator would have to sell off to pay debts of company A

If company A likely to remain solvent then this is by far the easiest least expensive way


(not a solicitor/ seek professional advice/insert disclaimer here/ etc etc)

Peterdalkey

Share purchase/sale attract Stap duty at 1%
Are the shares being acquired in Company B new shares or from an existing shareholder? If existing shares there may be CGT to be paid by the vendor.
Are they being purchased at actual value?
If Co A buys them and is then wound up, you have an issue with CGT as transfer will be a disposal, unless Co A it is kept alive even if non trading.
I am sure others will add to these comments but you really need proper financial advice from an accountant.

CompanyBureau

Company A buys the shares in company B with Company A cash. Once company A does not have majority of shares the company will still be audit exempt. Beneficial ownership not affected assuming purchaser is owner of company A

dbran

Seek professional advise from an accountant or tax adviser, not an online forum.

This is more complicated then it is being made out as there is information which is not given which will lead to different outcomes and therefore different advice/strategy.

dbran