Selling my shares of private ltd company

TalleyRand83

A bit to unpack here but glad of any help,I’m in a partnership of 6 shareholders of a private limited company and I’m about to pull trigger and sell my shares to other shareholders, all aware and within the shareholders agreement.

As I’m leaving early I’m happy to take a slight discount on the ebitda profit for financial year as well as a lower multiple by 1 or maybe 1.5 of the expected multiple in a sell out situation which is the direction the comp ah is primed for, I believe that’s a fair valuation and just wondering if sounds right? FYI no major bad blood or anything just a crowded situation and time for me to leave after playing a very significant part in making the company successful.

Second part, if I wanted to set up my own holding company at the 11th hour to hold most (but not all) of my shareholding is that legal and straight forward tax wise as this would allow me cash in personally on a small part of my percentage but have the holding company absorb the larger percentage for future investments without the CGT penalty

Gloomtastic!

Well done on getting where you are. Nice position to be in.

Not sure of the amount of money you are looking at but this is probably not the best place for advice. I believe what you are looking for is doable but you're going to have to talk to someone with expert knowledge and pay them accordingly.

One of the big consultancy or legal firms will be able to deal with this. Give them a call and speak to one of the tax partners.

tacofries

First part, we need to know more about the business.

Second part. Wohoho, this will open up a can of worms. The below is not advice and is heresay only so do not listen to it, however... Tax lawyers interpretation of tax laws around holding companies which have existed for less than 12 months and that within that initial 12 month period makes a disposal of shares which it holds is that the holding company is not entitled to a tax exemption on the disposal.

The opinion of accountants in the big accountancy firms say it is a grey area and that with proper put and hold calls on shares being put in place you may be tax exempt. Although they agree with the lawyers that the wording may suggest otherwise, accountants say they do share sales like this on a weekly basis and have yet to see revenue challenge it.

100% it is a grey area so thread carefully... If you do go ahead with it you will definitely need to get good advice on the correct mechanism to be put in place. Hopefully you're selling for a good price which may make the advice worth it.

Another disclaimer- Do not listen to the above. Do your own research and make your own decision!

y0ssar1an22

have a read of this:

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-06/06-09-01.pdf

if you satisfy the conditions you will be liable to CGT rather than IT.