I have a client, sole director and shareholder, who is transferring ownership of his limited company and receiving £40,000 for his shareholding. I understand he will pay capital gains tax at the business asset disposal relief rate, but some websites I have looked at indicate that the company pays corporation tax on the transaction too. Is this correct, as it seems like a double taxation, if so?  

Arthur replies: 

The company does not pay corporation tax on the transaction. This transfer is only taxable on the individual shareholder because the transaction is only a transfer of shares, and the company assets still belong to the company, as they did before.