Pre-float planning ― capital gains tax
The commentary set out in this guidance note applies to individuals rather than to the companies involved in the flotation. However, it is important that the impact of the flotation is considered from the perspective of all parties concerned to ensure that it is carried out in the most tax efficient manner, to the extent that commercial considerations will allow.
The flotation of a company does not automatically give rise to a capital gains tax charge in the hands of the shareholders. However, the flotation will generally increase the value of shares held and therefore some planning before the flotation may enable the shareholders to arrange their affairs so as to minimise later tax charges and to allow them to make transfers at lower tax cost, or to ensure that they maintain certain reliefs which have accrued.
Gifts of shares
Shareholders may wish to provide shares to others, taking advantage of the increase in value on flotation to make the gift more valuable. The key here is to ensure that
Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™
Access this article for free with a 7 day trial of Tolley+™ Guidance and benefit from:
- Expert practical tax guidance
- Ready-made templates, step-by-step-guides, interactive flowcharts and checklists
- The latest news updates, insights and analysis
Popular Articles
Class 4 national insurance contributions
Class 4 national insurance contributionsWhat is Class 4 NIC?Class 2 and Class 4 national insurance contributions (NIC) are paid by self-employed individuals and partners in a partnership on their profits arising within the UK. This guidance note considers Class 4 contributions. For Class 2
Foreign exchange issues
Foreign exchange issuesOverview of foreign exchange provisionsForeign exchange (FX) movements are generally taxed following the rules applicable to the underlying income, expenditure, asset or liability on which they arise, broadly as follows:Capital assetsOn a realisation basis (ie on disposal)
Class 1 v Class 1A
Class 1 v Class 1AClass 1 and Class 1AClass 1 and Class 1A are the categories of NIC that can be charged on expenses reimbursed and benefits provided to employees. These classes are mutually exclusive. A benefit cannot be subject to both Class 1 and Class 1A NIC. Three requirements must be met
