CGT Splitting

CGT Splitting

Didn't find your answer?

I think I know the answer but after taking a second look at my calculations I have started second guessing myself...

A client of mine wants a CGT plan for a new property he bought:
(1) A property bought in a limited company last Wednesday for £400,000. The property is roughly 50% commercial (the ground floor) and 50% residential (1st floor).
(2) Say my client holds on to it for 15 years.

For CGT purposes would the CG be calculated as being:
(1) 100% business use and therefore maximum taper relief in year 2
(2) 50% business use and 50% non-business use?

Confused ...

Graham Arnott

Replies (3)

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By kenmoody
03rd Dec 2008 09:35

Companies do still qualify ...
.... for indexation allowance for what it's worth. Did the client buy the company or did he put the property into the company? It's generally better to keep capital assets outside the company, and of course there would have been SDLT implications of putting the property into the company. If he bought the company he would have paid only 0.5% stamp duty but would inherit a latent CGT liability. Maybe that's not an issue if the intention is to retain as an investment. The shares are not business property for IHT purposes.

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By GrahamASA
02nd Dec 2008 23:25

See!
See, I told you I was confused.

Of course .. companies pay the full wack and were dealing with post-Darling changes. Man, I need to take a holiday and stop travelling every 3 weeks to clear my head!

Thanks for the refresher course. I'll make a note of your email - under tax hotline!

G

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By cathygrimmer
02nd Dec 2008 21:33

Very confused!
You are confused, Graham! Taper relief is no longer with us - we now have Entrepreneurs' Relief, and that, like Taper Relief is not available for companies. Sounds like you need access to a tax specialist - I'm happy to volunteer my services!

Cathy

[email protected]

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