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Where Taxpayers and Advisers Meet

Company CGT

Posts: 11
Joined: Wed Aug 06, 2008 4:01 pm

Company CGT

Postby antalya » Thu Oct 18, 2018 12:20 am

I am the sole director/99% shareholder in an investment company whose sole asset is a freehold property comprising of a lock-up shop and a self contained flat above both let separately. The flat has always been let on a AST basis and the shop on commercial leases since 1998 but between 1994 to 1998 the shop was used as business premises by the company. Am considering selling the property with a potential profit of £350,000 after deducting company CGT indexation allowance. The funds after a sale could be left in the company or withdrawn over a period of years or shares gifted to my wife. Any views on the best way of minimising CGT on disposal and extracting monies from the company would be much appreciated.

Posts: 220
Joined: Tue Sep 26, 2017 6:28 pm

Re: Company CGT

Postby AdamS93 » Thu Oct 18, 2018 9:32 am

A company pays Corporation tax on its gains, not CGT.

One of the (massive) pitfalls of holding property via a company is the double charge to tax when you want to get your hands on the money - this will be a massive problem in the years to come with a lot of landlords incorporating their BTL portfolios (not the best advice in my opinion - especially short-term).

As you say, once you sell the property, the cash will have to be extracted. You will pay income tax (either dividends or salary) or capital gains tax if you liquidate the company - company liquidations are quite expensive.

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