Commentary

I12.302 Private company shares

IHT, trusts and estates

I12.302 Private company shares

I12.302 Private company shares

Where gifts of private company shares are contemplated concerns may arise regarding the possible application of the reservation of benefit rules if a shareholder gives away part or all of his shareholding but continues to be involved in the company as a director (or an employee—for instance a consultant) in return for appropriate remuneration; it might be argued that the salary and other benefits paid to the donor following the gift constitute a reserved benefit.

The guidance contained in HMRC's Inheritance Tax Manual states1 that in such circumstances the continuation of reasonable commercial arrangements (in the form

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