| Family Stock Transfer / EMI options / income tax [message #385029] |
Sa, 06 Mai 2006 16:53 |
|
Dear All,
Me and my uncle run a small software development company, unfortunately my
uncle has 100% of the stock but has offered me 33% which I would like to
accept. We have spoken to our accountants who seem very keen on us using EMI
options.
As far as I can tell (from reading stuff on the net), my uncle should be
able to gift the shares to me with holdover relief, i.e. IMHO this should
pose no tax implications. However the accountants seem to think that because
I'm currently being employed by the company that the IR would want to charge
income tax on the stock. (Which would be a sizeable amount and would kill
most my personal savings).
I personally think that the accountants are trying to dissuade us from
gifting as they want the £5k they charge for EMI options.
A bit more background, my uncle has 2 small kids (both under 5yr old), so
his gifting of the shares is more of a natural progression of the family
company, so I cant personally see that it could be classed as
employment/reward and thus income taxable.
Would someone with more knowledge regarding this please let me know if I
should believe our accountants that I would have to pay income tax on
gifting?
Many thanks.
--
Ben
|
|
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| Re: Family Stock Transfer / EMI options / income tax [message #385035 ] |
Sa, 06 Mai 2006 19:41 |
|
The tax you pay will depend on the methods employed by the accountant. There
could be capital gains tax, even inheritance tax. What is EMI?
"Ben" <no [at] spam> wrote in message
news:445cb77f$0$699$fa0fcedb [at] news.zen.co.uk...
| Dear All,
|
| Me and my uncle run a small software development company, unfortunately my
| uncle has 100% of the stock but has offered me 33% which I would like to
| accept. We have spoken to our accountants who seem very keen on us using
EMI
| options.
|
| As far as I can tell (from reading stuff on the net), my uncle should be
| able to gift the shares to me with holdover relief, i.e. IMHO this should
| pose no tax implications. However the accountants seem to think that
because
| I'm currently being employed by the company that the IR would want to
charge
| income tax on the stock. (Which would be a sizeable amount and would kill
| most my personal savings).
|
| I personally think that the accountants are trying to dissuade us from
| gifting as they want the £5k they charge for EMI options.
|
| A bit more background, my uncle has 2 small kids (both under 5yr old), so
| his gifting of the shares is more of a natural progression of the family
| company, so I cant personally see that it could be classed as
| employment/reward and thus income taxable.
|
| Would someone with more knowledge regarding this please let me know if I
| should believe our accountants that I would have to pay income tax on
| gifting?
|
| Many thanks.
|
| --
| Ben
|
|
|
|
|
| Re: Family Stock Transfer/ Bank Charges Refunded / EMI options / income tax [message #385045 ] |
Sa, 06 Mai 2006 22:59 |
|
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|
|
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| Re: Family Stock Transfer / EMI options / income tax [message #385076 ] |
So, 07 Mai 2006 08:59 |
|
From what I gathered from the accountant EMI (Enterprise Management
Incentive) is a gov scheme where one is granted options with the
advantages over normal options:
1) income tax is only ever at the difference between the option price and
the value of the shares at date of the option grant (i.e. if the shares
double in price when the options are exercised then one would only pay
income tax on the initial value and not the new value).
2) CG taper relief starts from the date of the options being handed out,
and not the date they are turned into stocks.
3) Income Tax is only paid when the options are exercised.
What I'm more interested in is if the inland revenue would accept a personal
gift of shares (to a family relation and employee) is not a employment
reward (and thus wouldn't have any GC applied to the transfer if holdover
relief was used).
Thanks.
"Stickems." <Stickems. [at] last.invalid> wrote in message
news:Hd57g.520$mX1.417 [at] newsfe2-gui.ntli.net...
> The tax you pay will depend on the methods employed by the accountant.
> There
> could be capital gains tax, even inheritance tax. What is EMI?
>
>
> "Ben" <no [at] spam> wrote in message
> news:445cb77f$0$699$fa0fcedb [at] news.zen.co.uk...
> | Dear All,
> |
> | Me and my uncle run a small software development company, unfortunately
> my
> | uncle has 100% of the stock but has offered me 33% which I would like to
> | accept. We have spoken to our accountants who seem very keen on us using
> EMI
> | options.
> |
> | As far as I can tell (from reading stuff on the net), my uncle should be
> | able to gift the shares to me with holdover relief, i.e. IMHO this
> should
> | pose no tax implications. However the accountants seem to think that
> because
> | I'm currently being employed by the company that the IR would want to
> charge
> | income tax on the stock. (Which would be a sizeable amount and would
> kill
> | most my personal savings).
> |
> | I personally think that the accountants are trying to dissuade us from
> | gifting as they want the £5k they charge for EMI options.
> |
> | A bit more background, my uncle has 2 small kids (both under 5yr old),
> so
> | his gifting of the shares is more of a natural progression of the family
> | company, so I cant personally see that it could be classed as
> | employment/reward and thus income taxable.
> |
> | Would someone with more knowledge regarding this please let me know if I
> | should believe our accountants that I would have to pay income tax on
> | gifting?
> |
> | Many thanks.
> |
> | --
> | Ben
> |
> |
>
>
|
|
|
