Share Swap

Hollysan

Hello everyone,

Any thoughts on this capital gain issue? My client's company is US based, and is being bought out by US directors on a share for shares basis. His shareholding in the existing company is worth less than the shares he is being offered in the new company at current share price, so technically there is no gain; but he has asked if there are any other potential problems or things to be aware of from a tax perspective. I can't think of any, but if anyone can think of anything I would be grateful.

thanks,

Hollyan

Jmann

Share for share is not a disposal for the capital gains purpose. So there is nothing to do apart from keeping the records and terms of share swaps etc.

Hollysan

Thanks JMann, that puts my mind at rest - it's the legal side of it I'm not so sure of, but will pass on the advice about record keeping.

Thanks again.

Hollysan

deanshepherd

Hollysan wrote: »

His shareholding in the existing company is worth less than the shares he is being offered in the new company at current share price, so technically there is no gain;

Impossible!

His old shareholding is worth EXACTLY the same as his new shareholding in a share for share exchange.