CGT, ER and property development/investment

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where a group of individuals have set up a company with the intention to develop property, but given local market conditions are unable to sell the properties, and instead have temporarily rented the properties until conditions for sale are correct, would the winding up of a company via MVL be allowable for Entrepreneurs Relief, given the primary purpose was trade rather than investment. The majority of shareholder value has come from the development.

The individuals have done this once, and will not be seeking another venture, either together or separately.

I'm unsure whether this would be deemed a property rental business ergo investment income and therefore not qualify, or whether given the intended purpose was development, ergo a trade, it would qualify.

[bd6759]

If the property cannot be liquidated, how do propose liquidating the company?

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The property will be sold, its whether it should be treated as stock or investment.

The intention was to trade it as stock but market conditions have resulted in it being held as investment.

[AdamS93]

I vote no ER.

In TCGA 1992 s169I it is not about intention... it is about the facts which appear to seem it is not a trading company.

Their intention may come in to it if they held the property personally under the transaction in land rules but they are not selling (well liquidating) land, they are disposing of shares.