Filing S431 Election

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anonlh2020

  • #1
    Apologies for the duplicate post, wasn't sure which specific forum area was best to post this question.

    I am a sole founder, shareholder and director looking to register a limited company.

    I was looking to file an S431 election upon issue of my shares, so as to incur the income tax charge upfront on the UMV of the shares as opposed to incurring an income tax charge later on in the case of a sale.

    Do I just need to fill out the form and keep a record on file or do I need to file a copy with HMRC or Companies House?

    Also, does the form become pointless if I'm just the sole shareholder using model articles and without any restrictions to the shares anyway?

    Appreciate any advice you can offer.

    Many Thanks

    EDIT: Having just read a post on elsewhere I now know, the form doesn't need to be sent to HMRC, just need to keep a copy of the completed form and produce to HMRC if they do ever ask for it.

    I guess my question now would be, do I need to fill out this form with a solicitor or accountant or can I just do it myself?

    Anybody got any experience in this area, your advise would be much appreciated.
     
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    Rawlinson Pryde

    Rawlinson Pryde

    Free Member
    May 9, 2020
    204
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    Bedford
    rppaccounts.co.uk
  • #2
    From what you have said it sounds like you do not need to do an election, as you received the shares as a shareholder on its incorporation and not as an employee (Job related security) as part of a share scheme which placed restrictions on the shares.

    A s431 election (must be made jointly by the employer and employee within 14 days of the award) removes the restriction placed on the shares and charges them to income tax now, with any future rise in value subject to a Capital Gain.

    Generally it is used to perhaps incentivise an employee to stay and grow the company but ensure they are committed for a certain period of time.

    As we replied on 31 Oct to another of your posts, you would need to register the scheme with HMRC and submit an ERS form by 6 July after the tax year has ended if you feel it is a reportable item.
     
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