Hi stubo79.

Was the subject of your shareholding discussed when your trust deed began?

How much are those shares worth if you had to sell them?

Hi,

I wasn't a director of a Ltd Company when I signed the TD. I only became self-employed a year ago. They are aware if it but haven't asked for anything relating to my business. I withdraw a modest salary from the business which they know about and my contributions are based on this, however, I am afraid they will ask for my company accounts and take all my business profits from me.

I'm unsure of the value of my shares but my company was in profit at year end in August last year.

I can find out the value of my shares from my accountant.

thanks.

Valuing shares is a tough business stubo79. I guess it comes down to what someone would actually pay for the assets of your company and their perception of the future profits that could be generated from their investment.

If the business is relatively new, doesn't hold a large cash balance, and depends heavily upon your personal input, the amount that someone else might pay for those shares could be pretty low.

If that's the case I think it's pretty unlikely that your trustee would have much interest in your shareholding at all.

Thanks for quick response,

Yes I am the sole director and essentially run the company myself, If I don't work then no money comes into the business.

In my mind I thought if I am 100% shareholder then they would be interested in all of my companies profits as that can be seen as an asset?? Is that incorrect?

I have a reasonable cash balance but this money is used to pay for company expenses etc.

For example if I had a 50k balance in my business at year end after tax would they look to take that from me? This would make my business worth nothing and I would be unable to work.

many thanks for your help so far...

I'm not sure if the £50k figure is hypothetical, but I would say that a cash balance like that could certainly mean that your shareholding has a significant value, unless there are also significant liabilities on the balance sheet?

Hi Kevin,

I'm just not sure how the value of my shares relates to the amount of money they can take from me. Obviously any money I withdraw from my business for personal use has personal tax implications and a withdrawal to settle a trust deed requirement would fall into that category.

As I say if my company is in profit, which it is, with me being a 100% shareholder can they take all of that profit? That's really the question...

many thanks for all your help

I can see why you're asking this question stubo79, but I'm not sure it's the question that your trustee would ask if they looked into this.

Kevin's questions about liabilities on your balance sheet seems very important - something perhaps to discuss with your accountant.

Hi TDA,

Thanks for the response, I have made an appointment with my accountant this week to discuss this and see what my options are.

I'll keep you updated on my progress. Hopefully only 3 payments left and I cannot wait to put this TD behind me, it's been stressful to say the least!

Many thanks again for your input guys...

Please let us know how things develop stubo79.

There is also the possibility that this isn't an issue that your trustee will look into in-depth - but it's obviously best to be prepared.

Hi stubo79,

With a lot of people as they approach the end of their Trust Deed's their minds start to go into overdrive and think of all of the possibilities that could happen.

Generally speaking if someone has co-operated, maintained all of their agreed payments and any assets have been dealt with then the discharge process should be relatively quick and straight forward.

Kevin and TDA make good points when it comes to the Limited company and the value of your shareholding. If you are effectively the ÔÇ£businessÔÇØ and if you stopped working for the business would the company stop. Also, if the Ltd company has liabilities then this is something which will need to be taken into consideration.

It may not be something that your Trustee looks into but as TDA has advised best to be prepared. If your Trustee does question this then you could propose a nominal sum for the shareholding that you have which may satisfy the Trustee.

Speak with your accountant about it and if your Trustee raises the point with you let us know and we can give you further advice.