Ruddles
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Gift to trading company

Gift to trading company

Before I begin, no advice please on how things could have been done differently - looking specifically for the answer that I know is in the back of my mind, but cannot elicit.

Individual gifts a chargeable asset (non-business asset in his hands) to his trading company. The asset will form part of the company's trading stock. For CGT purposes, he's treated as selling the asset at MV. The question - how is it accounted for in computing the company's trading profits?

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22nd Jun 2012 16:28

You know this could have been structured more effectively? :)

Either S.158 or S.160 CTA 2009 applies. It goes into stock at it's market value on acquisition, broadly.

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By Ruddles
22nd Jun 2012 17:26

Of course I do :)

But it was a done deal before I was appointed.

But thanks for the response - very helpful. I don't think s158 applies, because the assets do not belong to the company at the time they become trading stock. So s160 it is.

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22nd Jun 2012 18:11

How would you structure this more effectively?

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By Ruddles
27th Jun 2012 20:49

Next question

Again accepting things have not been arranged very efficiently - just to confirm (or not) my understanding:

Individual gifts valuable chargeable (non-business) asset to his company (currently a shell). Individual then gifts 50% of his shares to another person. Strikes me that there are two chargeable gains here, correct?

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