Issue 1
Client X is a director of a large company. By virtue of his work he has acquired, over a number of years, shares through various different types of share schemes operated by the company. Client X wanted to reduce his interest in his employer’s entity and, sensibly, diversify his investments.
We explained the various applicable share matching rules to Client X as he was keen to understand them. Looking at the various capital gains tax implications of each scheme we established the base cost of his shareholding. This review took into account forthcoming share additions.
The benefit
Armed with the relevant information we were able to advise both Client X and his wife how many shares they could sell without generating a capital gains tax liability. The couple managed to realise funds in the region of £313,000 free of capital gains tax.
Client comment
“Paul provided us with professional and clear advice that allowed us to execute our plans with a minimum of fuss. I also learned quite a bit about the convoluted tax regime we live in. Without his help I am sure I would have built up a substantial and unnecessary tax liability.” Camberley client
Issue 2
Mrs X was an employee until recently. Upon leaving her old company she decided to form her own one to offer consultancy services in her field of expertise. In the year ended 5th April 2012 she was faced with a number of considerations – principally whether to sell shares in her former employer and how to structure taking funds out of her new company.
We considered our client’s personal circumstances and calculated the amount of shares she could sell without generating a tax liability. In addition we explained the options available to her concerning extracting funds from her new company. We established that she had made some personal pension contributions and that her company had made sufficient profits to enable the payment of a dividend.
In Mrs X’s case the payment of personal pension contributions meant that she could take a slightly higher company dividend without having to pay higher rate income tax.
The benefit
Mrs X was able to sell shares to the value of circa £27,000 and she voted herself a dividend of £3,800 without crystallising an income tax liability.
Client comment
“I would highly recommend PMA tax solutions. After leaving many years of corporate life, the prospect of setting up my own company was slightly daunting. However using the services of Paul's company has made the process considerably easier. As well as providing a highly efficient and cost effective accountancy service, Paul has willingly answered many questions and I have had provided clear, sound advice to ensure my company operates at a high level of integrity and that I have a much better understanding of my income tax position.” Camberley client
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