The Tax Implications of Alphabet Shares in Owner-Managed Businesses

Introduction

The use of multiple classes of shares - commonly known as alphabet shares - is widespread in the Owner-Managed Business (OMB) sector, particularly when businesses seek to distribute dividends at varying rates among shareholders. While this approach can offer flexibility, it also carries significant tax and legal considerations.

This seminar will explore the key tax implications of implementing alphabet shares and highlight the risks and potential pitfalls when such structures are used for inappropriate purposes.

Presented by Nick Wright of Jerroms Miller, this is a practical and highly interactive seminar which will include case studies and roundtable discussions. It is ideal for accountants, tax advisers, legal professionals, and business owners who are involved in structuring or advising on ownership and remuneration strategies within OMBs.

What You Will Learn

This course will cover the following:

• Share Reorganisations
• What they involve and how to ensure no Capital Gains Tax (CGT) liability arises when introducing alphabet shares
• Employment-Related Securities (ERS) Implications
• When alphabet shares fall within ERS rules and what that means for tax treatment
• Dividends or Earnings?
• Evaluating common planning scenarios and their validity in light of recent HMRC scrutiny
• Value Shifting Provisions
• Understanding how value shifting rules might apply when new share classes are issued
• Companies Act Considerations
• Legal compliance issues to be aware of when creating or amending share structures
• HMRC Reporting Requirements
• What needs to be reported, and when, to avoid penalties or retrospective challenges