UK Small family company share transfers

[Nodrog]

Father and son hold 50 £1 shares each in a company which is run and operated by the son, the father is basically a sleeping partner. The company is about 4 years old with net assets of £20k and the father wants to retire from the business. He only wants the nominal value of £50 for his shares being £10 from his son and £40 from the sons fiancée.
With this scenario how should this be reported to HMRC?
Or would the father be better gifting the shares and making an election?
As I see it the share sale is at an undervalue for CGT but the annual allowance of £11,300 should cover any gain.

 

[Fidget]

It'll be based on Market Value of the shares which, seeing as they're unquoted, is decided by HMRC. Gifts, outside of inter spouse/civil partner gifts, are at market value. If he sells them at par to son & fiancée then gratuitous intention exists because the father is not looking to profit from the sale, so it would still be at MV as decided by HMRC. May well be that HMRC agrees that the par value is the market value for them, but it's up to it to decide that.

 

[Nodrog]

Thanks for your response.
How does HMRC get to know?
Does Form 42 still exist and is that the medium for reporting.

 

[Fidget]

Speak to HMRC about that. This isn't a personal helpline you know!