Inheritance tax liability and potential CGT/IT liability

[Census_Pro]

Can anyone help me with the following scenarion:

Say I inheritated a 20% shareholding valued at £800,000 a few years ago and ended up with a resulting liability of £160,000. I took out a loan to pay this liability and continued working in my full time job with no active involvement in the company I own 20% of.

I have now been put on protective notice with the possibility of being let go. I have enough ash to cover my mortgage etc for six month but would not be in a position to pay off my inheritance tax liability.


The directors of the the copmany have come up with two suggestions
The company provides me with an interest free loan and I can defer repayments for 4 years
The company buys back 15% of my shareholding at market value which is considerably less than what it was woth when I inherited the shares. The current market value of which is £1 million.
Can anyone advise on the implications for me and the company in both scearios and which one I should go for?

[David Griffiths]

Some clarification is needed.

Is this a trading company? Why is there an IHT liability on a 20% shareholding in a trading company? :| And why is it £160K suggesting a 20% rate of IHT?

You say that it was a few years ago. How many years exactly?

[Census_Pro]

Im not so much concerned about the compuation of the IHT liability. £160,000 is round sum to the best of my memory.The value of the 20% shares was £800,000, in effect its being treated if I inherited £800,000. This was three years ago.

What I'm more interested in is the directors proposals.