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Not so hasty
Initial response - look at roll over relief on the sale of the property.
It's always wise speaking after the event but you really should have looked for tax planning advice before selling the property.
Lots of information but much more needed.
I would suggest that you get as much information together as possible and speak to an accountant.
Chargeable gain
I agree with Kent accountant on possibility of rollover relief, but also how has the gain been calculated. Is this the accounts profit or is it the taxable gain? For instance, look at indexation, Mar 82 valuation if relevant, costs disallowed for CT that might be reflected in the state of the asset on sale.
Rollover relief...
... isn't available because the asset disposed of needs to have been used only for the purposes of a trade carried on by the person disposing of it. The property appears to have been used for the purposes of renting it to someone else, which isn't a trade.
On the facts provided, I'd agree with with the first poultry response.
Or he should have groups the repairing of taxi company underneath so lease to a s/s might (??) have qualified for rollover. Surely it would, i'm guessing.
But all too late now I'm afraid.
Buy a car, rent to it to a taxi driver. The client is a landlord / investor. Not a taxi driver.
What was the freehold property used for? Storing all the taxi cabs? Did they all come back to base each night?
I thought...
... that the property was used for the purposes of a trade carried on by "the director's other company".
If it has been used for the purposes of a trade carried on by a group company, S. 152(7) might apply if reinvestment where made in an asset brought into use for the purposes of a trade carried on by a group company.
By letting it to another company that's simply under the control of the same individual though, means it is just letting and not a trade. It also seems to be proposed to reinvest in other rental properties.
Can you clarify?
I thought from the original post that the company which owned the property, call it X Ltd, (and sold it and made the capital gain) rented out the property (a) originally to another company, call it Y Ltd, owned by a shareholder in X Ltd and (b) later to another company, call it Z Ltd, unconnected with X Ltd or Y Ltd.
So the question is, "Was this property used by X Ltd for the purposes of a trade which was carried on by X Ltd?" and the answer to that question is, "No, the property was rented out by X Ltd".
That being the case there appears to be no roll over relief available.
Have I misunderstood something?
David
OK
Your latest reply gives a different impression of the underlying facts. You are now saying X Ltd DID use the property for its own trade until two years ago.
David