A family are looking at doing a share buyback but want to confirm they will get capital treatment first.
One of the conditions in 1035/6 cta 2010 is the 5 year ownership period, reduced to 3 ‘If the seller became entitled to the shares under the will or on the intestacy of a previous owner, or is the personal representative of a previous owner’ - it can be reduced to a 3 year period.
My client’s mother died in 2010 - left a Will leaving shares in a company to husband. Husband undertook a deed of variation in 2012 to create a will trust for these shares - initially a DT for 2.5 years and then an IIP for him for life. Upon his death the two sons were absolutely entitled.
My question relates to one of the Sons who will be taking part in the buyback - does he qualify under the shorter ownership period? He has personally held them now for 2.5 years and doesn’t mind waiting a few months to reach 3 years (or could potentially aggregate ownership) but would he fall into this exception? Technically the shares came to him via the wording in the Will - but via a Will trust inbetween? It is via a Will of a previous owner but it just isn’t totally clear to me.
Many thanks
Lucy Dyer
Mazars LLP