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

1. The company provides me with an interest free loan and I can defer repayments for 4 years
2. 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.