Change to Limited Company

drjohngreeves · Postby **drjohngreeves** » Wed Feb 23, 2005 12:38 am

If I move my two properties into a limited Company is there going to be a Tax Charge on the increase in value since I first brought them? - to the time I transfer them to the Company

jamesconstantine · Postby **jamesconstantine** » Wed Feb 23, 2005 1:58 am

Hi

if the values have gone up, you could be facing a (large?) capital gains tax bill. Whilst by transferring into company, the latter might face anothe CGT bill if and when it disposes of the proeprties. To make it even worse, you would be facing a fresh CGT bill when you shut the company down. Could you think of another more nightmarish scenario- well it looks like a snow gale to me)? (of course, as I always say this is general and it depends on someone's personal and business circumstances).

James Constantine FCCA
Chartered Certified Accountant
http://www.taxadviceuk.com
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JSK TAXATION · Postby **JSK TAXATION** » Wed Feb 23, 2005 2:00 am

A short question but not easy to reply fully without further info.

Are the properties UK situated?

Are you UK domiciled?

Is one of the properties your main residence?

Broadly if you sell the properties to the company then there will be a CGT charge on any gains relating to any uplift in value arising when either of the properties could be viewed as an investment property. You would need to obtain a forma valuation since the disposal would be to a connected party.

If you gift the properties there would be an immediate charge to Inheritance tax.

If you can provide a little more info I would be able to provide more detailed response.

John King ATT
johnking@tax2002.fsnet.co.uk