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Where Taxpayers and Advisers Meet

Holding Company to acquire property

170872
Posts:75
Joined:Wed Aug 06, 2008 3:41 pm
Holding Company to acquire property

Postby 170872 » Wed Apr 13, 2016 2:41 pm

I'm not sure how much of an easy question this will be to answer but I'm hoping that one of you can help me out as I've asked a few people now including my bank manager and few accountant but neither seem to be sure of the best way to proceed.

If 3 properties each worth 350K (mortgage free) is in a limited company with 2 directors (A & B) and A is a 82 yers old is a major shareholder in the Ltd company.
Can A set up a holding company 100% owns by her and transfer the property to holding company by share swap? My understanding is there wont be any stamp duty and CGT as it is a transfer between group companies.

The intention being that Director A is 82 years old lady and Director B is young and he may take over everything if something happens. It hasten to add, I don't see this being a likely scenario but I want to ensure that her only daughter is protected in the event of a worst case scenario one day. Her only daughter is mentally ill and in nurshing home.

What will happen to the old company? will it be Dormant then? Can A then close the old company? What will happen to Director B?

Thanks in advance for your help.

section 44
Posts:4467
Joined:Thu Oct 30, 2008 12:47 pm

Re: Holding Company to acquire property

Postby section 44 » Wed Apr 13, 2016 4:25 pm

My understanding is there wont be any stamp duty and CGT as it is a transfer between group companies.
what group?

170872
Posts:75
Joined:Wed Aug 06, 2008 3:41 pm

Re: Holding Company to acquire property

Postby 170872 » Thu Apr 14, 2016 8:51 am

Sorry I mean transfer to the holding company and both company are connected

Chanmuganathan
Posts:144
Joined:Wed Nov 24, 2010 2:39 pm

Re: Holding Company to acquire property

Postby Chanmuganathan » Thu Apr 14, 2016 2:01 pm

"Can A set up a holding company 100% owns by her"

Which ever way you describe, in essence, B dispose his shares in business to A, then why bother setting up a holding company and transferring the properties?

There are capital gain tax consequence for B.

170872
Posts:75
Joined:Wed Aug 06, 2008 3:41 pm

Re: Holding Company to acquire property

Postby 170872 » Fri Apr 15, 2016 12:12 pm

Hi Chanmuganathan thanks for your reply.

A is the 100% shareholder in the company, B is just a director. If A set up a holding company and the holding company acquires A's shares inthe Ltd company can she achiever her objective


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