tax implications of selling share in CC

[frankh]

I am currently a member of a CC with a 25% share. My brother who also holds 25%, but has had no active involvement in the cc for many years would like to give / sell his shares to me.
What would be the most effective way of going this?
Does the cc pay him out, thus reducing the value of the cc but increasing the remaining members % share?
Should I pay him out in my private capacity?

Most importantly, what are the tax implications for us and the cc?

Kindest regards
Frank

[Marq]

Does the cc pay him out

The cc cannot buy your members contribution. You should do this in your personal capacity after having determined the fair value. Remember then to submit the CK forms reflecting the change.

Tax - you need a tax guy...thats not me, I fell asleep in that class. He will have to watch for CGT, the cc for STC and you will have to watch your bank balance.

[Dave A]

Capital Gains Tax would be payable by the seller on the purchase price received less the original purchase cost. If the member interest was acquired prior to the introduction of CGT*, the calculation of the portion attracting CGT is a little more complex.

Secondary Tax on Companies is on distributable profits payments.

*somewhere around the year 2000 from memory.