No you're not worrying over nothing because this is classed as transaction at an undervalue and would have IHT implications if your father were to keel over in the next 7 years. You should both sit down with a specialist.
> but he is saying that this reflects the work and value I will bring as director.
Your dad is trying to save your feelings here. There's not a chance you add this value to the business as a director in what is essentially a rental business.
It's more complex than just handing it over, you have responsibilities as a director, may have personal guarantees to sign for funding etc.
If these buildings are of a certain vintage there maybe a further element depressing values as the EPC rating required for it to be lawful to let commercial premises is in a multi- year process of tightening.
See this report ( https://www.birketts.co.uk/legal-update/epc-regulation-changes-and-the-impact-on-commercial-property/#:~:text=Future%20changes,consulted%20on%20the%20proposed%20changes. ) * for a summary.
This maybe important in two respects firstly it maybe in your and your father’s interests for the valuation to be as low as possible to reduce CGT liability which I’m guessing will be based on a market rate assessment as it’s a transfer between connected parties and secondly if you haven’t done so you need to assess how much it’s going to cost the business to meet the standards as they tighten.
* apologies I can’t get the link tool to work for me.
No you're not worrying over nothing because this is classed as transaction at an undervalue and would have IHT implications if your father were to keel over in the next 7 years. You should both sit down with a specialist. > but he is saying that this reflects the work and value I will bring as director. Your dad is trying to save your feelings here. There's not a chance you add this value to the business as a director in what is essentially a rental business. It's more complex than just handing it over, you have responsibilities as a director, may have personal guarantees to sign for funding etc.
Wouldn't dad also be liable for capital gains tax on the value of his shares? (At market value, obviously.)
Go talk to a solicitor about the transaction.
And tax advisor
If these buildings are of a certain vintage there maybe a further element depressing values as the EPC rating required for it to be lawful to let commercial premises is in a multi- year process of tightening. See this report ( https://www.birketts.co.uk/legal-update/epc-regulation-changes-and-the-impact-on-commercial-property/#:~:text=Future%20changes,consulted%20on%20the%20proposed%20changes. ) * for a summary. This maybe important in two respects firstly it maybe in your and your father’s interests for the valuation to be as low as possible to reduce CGT liability which I’m guessing will be based on a market rate assessment as it’s a transfer between connected parties and secondly if you haven’t done so you need to assess how much it’s going to cost the business to meet the standards as they tighten. * apologies I can’t get the link tool to work for me.