Questions about TAX and SHARES

[Timothiii]

Some Questions about TAX and SHARES, anyone can help?

May I know the in year 2025,
2) how much tax / fee have to be paid to UK gov if B allot 99% shares to D (net asset £30,000)?
3) how much tax / fee have to be paid to UK gov if A transfer 1% share to D at £100?

Scenario as follow:
year 2021, I (as a Director "D") hold 100% shares of an overseas limited company ("A");
year 2022, UK limited company ("B") incorporated under A's name (A hold 100% shares amounted at £100,000 of B £100,000@), D as A and B's director;
year 2023, B bought a car £100,000;
year 2025,
1) B's financial position is Net asset £30,000 / Net loss £70,000 / share capital £100,000;
2) B allot 99 shares (99%) to D at £99, £1@ (B total issued 100 shares, capital = £100,099)
3) A sold 1% share to D at £100. D owns 100% of B now.

 

[MyAccountantOnline]

Some Questions about TAX and SHARES, anyone can help?

May I know the in year 2025,
2) how much tax / fee have to be paid to UK gov if B allot 99% shares to D (net asset £30,000)?
3) how much tax / fee have to be paid to UK gov if A transfer 1% share to D at £100?

Scenario as follow:
year 2021, I (as a Director "D") hold 100% shares of an overseas limited company ("A");
year 2022, UK limited company ("B") incorporated under A's name (A hold 100% shares amounted at £100,000 of B £100,000@), D as A and B's director;
year 2023, B bought a car £100,000;
year 2025,
1) B's financial position is Net asset £30,000 / Net loss £70,000 / share capital £100,000;
2) B allot 99 shares (99%) to D at £99, £1@ (B total issued 100 shares, capital = £100,099)
3) A sold 1% share to D at £100. D owns 100% of B now.

Do you really mean 2025?

 

[WaveJumper]

Do you really mean 2025?

forward planning ???

 

[Timothiii]

Do you really mean 2025?

nono, just an example
can adopt existing tax rule ?

 

[Newchodge]

Ask your tutor.

 

[Bobbo]

So overseas company is going to incorporate a UK subsidiary with £100,000 share capital.
That UK subsidiary is going to buy a car (you don't say what is to be done with this car - is it to be provided for the personal use of the director D)?
After a few years, the UK subsidiary will issue shares at undervalue to D and the overseas company will sell the remaining other share to D also at undervalue.
Director D will then own the UK subsidiary which will own a car of some value.

In essence you are trying to get a £100,000 car using money currently tied up in a company without any income tax.

If only it was that easy. Under the arrangements you suggest there would likely be tax for B and D in 2023, 2024 and 2025.

You may also find if you are UK resident that A is already within the scope of UK corporation tax and owes some amounts to HMRC.

 

[Timothiii]

So overseas company is going to incorporate a UK subsidiary with £100,000 share capital.
That UK subsidiary is going to buy a car (you don't say what is to be done with this car - is it to be provided for the personal use of the director D)?
After a few years, the UK subsidiary will issue shares at undervalue to D and the overseas company will sell the remaining other share to D also at undervalue.
Director D will then own the UK subsidiary which will own a car of some value.

In essence you are trying to get a £100,000 car using money currently tied up in a company without any income tax.

If only it was that easy. Under the arrangements you suggest there would likely be tax for B and D in 2023, 2024 and 2025.

You may also find if you are UK resident that A is already within the scope of UK corporation tax and owes some amounts to HMRC.

the car is 100% for business use.

yes, the situation is that D will hold B directly in 2025 but not indirectly via A.

and A has no profit for those years, I think no UK corp tax is needed?

I am wondering how the stamp duty be taxed and any capital allotment tax have to be paid.

thanks all the help.