Hi - first post here!
Hoping somebody might have been in my situation before and can offer some advice.
One of my clients wants to gift me shares, which is great! However, I really don't understand the tax situation here, and I'm trying to figure out a few points:
- I know I'll be liable for CGT when I eventually sell the shares, but I'm not too worried about that. What I am concerned about is that these will be considered income, and therefore taxable. The client has valued the shares at £40,000, and I don't want to end up paying tax on that (especially since I'm not sure I could sell them at that valuation at the moment, given the business is a start-up and yet to launch.) I obviously expect to pay tax on any dividends.
- This gift is not in lieu of payment - so I don't consider renumeration, rather a gift/incentive. The founders are very keen to share success any success the business does get with those who have been involved from the start.
- I'm concious that this could impact my IR35 status. I maintain a strict boundary on these things to ensure I remain outside of IR35.
- I don't know whether it would be better for either my tax or IR35 status if I receive shares personally or through my ltd. company.
Ultimately I do have a call with my accountant to discuss this, but having to wait til Friday to get their time, so hoping I can get an idea of where this conversation will go (especially if I might end up rejecting the offer).
Thanks in advance!
Hoping somebody might have been in my situation before and can offer some advice.
One of my clients wants to gift me shares, which is great! However, I really don't understand the tax situation here, and I'm trying to figure out a few points:
- I know I'll be liable for CGT when I eventually sell the shares, but I'm not too worried about that. What I am concerned about is that these will be considered income, and therefore taxable. The client has valued the shares at £40,000, and I don't want to end up paying tax on that (especially since I'm not sure I could sell them at that valuation at the moment, given the business is a start-up and yet to launch.) I obviously expect to pay tax on any dividends.
- This gift is not in lieu of payment - so I don't consider renumeration, rather a gift/incentive. The founders are very keen to share success any success the business does get with those who have been involved from the start.
- I'm concious that this could impact my IR35 status. I maintain a strict boundary on these things to ensure I remain outside of IR35.
- I don't know whether it would be better for either my tax or IR35 status if I receive shares personally or through my ltd. company.
Ultimately I do have a call with my accountant to discuss this, but having to wait til Friday to get their time, so hoping I can get an idea of where this conversation will go (especially if I might end up rejecting the offer).
Thanks in advance!
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