Can anyone help!!!
There are two companies A & B with same shareholder.
There were historic loans from company B to company A to provide funds for property purchase.
Now both the companies are not required and the shareholder has requested to transfer the property title to his own name (for nil consideration) and wish to waive off the inter company loan
How should we treat the transfer out of property in the company accounts?
Also if one of the property title is transferred to some other company with same shareholder as above but the company is in different jurisdiction.
Replies (5)
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Whatever the actual consideration is (£Nil or otherwise) the company will be deemed for tax purposes to be selling the property at market value, and may have a tax liability accordingly.
In what sense is the company that owns the property "not required". That sounds like an odd thing to say before it has disposed of its property. After the property has gone, and it is dormant, that would be a different matter.
Overseas?
If the company is registered in a jurisdiction with no capital gains tax, would it not be better to ask the opinion of those with local knowledge? You don't say where the management and control of the company sits. Nor do you indicate the nature/location of the property.
Overseas company
Scrub my response then. As Ruddles says you have asked your questions in the wrong country.
UK tax could apply in a number of ways
1] Has the property been used for a trade conducted in the UK [such as an hotel] by the same company.?
2]Has the company owning the property been filing for income tax as a foreign landlord?
3]SDLT also needs to be considered,.. A transfer in specie in a liquidation or by way of an offshore dividend-properly documented !- may avoid the problem, unless the transfer is subject to a loan.
4] Has ATED applied to the property?