§ Mr. Trotterasked the Chancellor of the Exchequer, when a father and son are directors of a close company the majority of whose shares are owned by the father and the father gives his shares valued at £200,000 to his son, what capital transfer tax would arise if the tax were paid (a) by the father, and (b) by the son ; and, on the assumption that the funds to pay the tax had been withdrawn net of tax from the company over a 10-year period and represented the only benefit of the person concerned from the company, how much tax would be paid on the sum withdrawn.
§ Mr. Joel BarnettIf the tax were paid by the father the capital transfer tax arising would be £109,688, and if it were paid by the son, £51,375.
The answer to the second part of the Question would depend on a number of variable factors, including the form that the withdrawal took and the personal circumstances of the person concerned. I regret that, in any case, whatever assumptions were made as to these factors, it would take an undue expenditure of time and resources to provide an answer to this part of the Question.