Tax implications of transferring all company shares?

Hi asmoore,

Thanks for the reply. A couple of notes about the legal stuff, but I'll leave the bulk of that for the discussion in the legal forum:

1. Although personally for me this may be a temporary switch, once the switch is made with Companies House, there is no reason for them (or the Home Office issuing work permits) to assume it is anything but a permanent switch. At that point, it should fall into work permit regulations, as the main idea is that I cannot be the owner of the company for which I am applying for a work permit. So I don't believe there is anything reason for the Home Office to reject such an application, even if they do have access to the previous records, because the current state of affairs should be acceptable.

2. I am already here on a work permit from another company, which theoretically could keep me here for another 4 years. The problem is that all work permits are technically void when you switch companies - so even if I did what you are suggesting, I would never be able to switch back to working for my own company, because I would always end up in the same situation I'm in right now.

3. Worst case, I suppose I could shut down my company completely, and then start up a completely new company and set up a new contract to replace the old contract - in this case, I could have the appropriate person acting for me as director and shareholder right off at the start - the problem here is that I would need to set up a new bank account, and go through all the formalities again, and pay the formation costs again (unless I know enough to do it myself this time).

Ok, regarding the tax issues:

1. I half-way understand what you are telling me. So basically when I transfer the company to someone else, I need to apply capital gains tax to the full amount of profit earned by the company up to that point. How do I define this profit? Is it before or after dividends and/or tax are paid out? I assume it is definitely after expenses and salary are paid out? Is it simply the amount in the bank at the time? If my account is essentially empty, because I've maxed out dividends up to that point, is there any profit? What is the best way for me to minimize these capital gains until all of this is done? Should I hang on to all invoices until I regain control of the company, and make my customer aware that they are going to get a big chunk of invoices in a couple of months?

2. Where can I get a good idea about the tax rates and breakdown for this particular tax (capital gains)? Or is it simple enough for you to explain how it works? And when exactly is it due?

3. Regarding the idea that I can't pay myself dividends while I'm not a shareholder - yeah obviously you're right, I don't know why I didn't think of that. So I guess I'll pay the max dividends possible up until the last moment, and then start paying salary during that period. Is it possible for me to pay all of my salary for the year during that period, and then switch back to only paying dividends after I regain the shares? Or does salary need to be balanced throughout the year with even amounts each month?

Thanks again - your advice is very helpful.