Company has part shareholding in residential building

Company has part shareholding in residential...

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Company has a one sixth share in block of flats. If sold is it subject to property sales tax?

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By johngroganjga
12th May 2015 14:22

In principle, when a UK company sells an interest in property it will pay corporation tax on any gain less indexation allowance.

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paddle steamer
By DJKL
12th May 2015 14:26

More information needed

I think you need to supply somewhat more information regarding what is held, why is it held, through what vehicle is it held, what has the property been used for within wherever it is held, how is the investment whatever it is reflected in the company's balance sheet, how long has the company had this interest etc.

Are you trying to say the property is owned within company B and company A is selling its shareholding in company B, which is 1/6th of the shares in issue in company B?

Also what do you mean by property sales tax?

 

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By johngroganjga
12th May 2015 14:29

Yes sorry missed the word "shareholding" in the question.

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By Steve Kesby
12th May 2015 14:59

DJKL's questions...

... are not entirely redundant Basil.

The "Also what do you mean by property sales tax?" is by far THE most relevant question.

If the OP means SDLT (LBTT for Scottish users), then the answer's a simple "No", as it is the purchaser who pays SDLT.

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By Steve Kesby
12th May 2015 15:26

Our interpretations differ Basil

The OP states that the company has a one-sixth share in a block of flats, and then asks "is it liable to property sales tax".

I take the "it" to mean the company, rather than the block of flats. You may, of course, be correct in your interpretation. Only the OP (who was reluctant to tell us much) knows.

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paddle steamer
By DJKL
12th May 2015 15:30

The why is it held may also negate corporation tax on gains, it might be held as trading stock. (appreciate unlikely) and therefore corporation tax on a trading profit.

We are all assuming an investment property- that is probably the most likely answer but not the only answer.

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By Democratus
12th May 2015 16:26

If only PNL were here

...I am sure the quality of the question would receive some acerbic critique. 

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