Commentary

I12.507 Burnt out share arrangements ('time-bomb shares')

IHT, trusts and estates

I12.507 Burnt out share arrangements ('time-bomb shares')

I12.507 Burnt out share arrangements ('time-bomb shares')

This exercise involves a bonus issue of deferred shares which under the articles of association of the company carry only meagre rights at the outset. After a period of ten years or so, machinery in the articles of association allows value to attach to the deferred shares so that they then rank on a par with the ordinary share capital. With the deferred shares having a small value upon issue, the proprietors of the company are free to make a transfer of such shares bearing a very low value for IHT and CGT

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